Exhibit 99.2
HRPT PROPERTIES TRUST
Third Quarter 2005
Supplemental Operating and Financial Data
All amounts in this report are unaudited, except for the
December 31, 2004 Consolidated Balance Sheet.
WARNING REGARDING FORWARD LOOKING STATEMENTS
CERTAIN STATEMENTS AND IMPLICATIONS CONTAINED IN THIS SUPPLEMENTAL OPERATING AND FINANCIAL DATA REPORT FOR THE QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2005 ARE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT BELIEFS AND EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. SUCH FACTORS INCLUDE, WITHOUT LIMITATION, CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS, COMPETITION WITHIN THE REAL ESTATE INDUSTRY OR THOSE INDUSTRIES IN WHICH OUR TENANTS AND FORMER SUBSIDIARIES OPERATE, AND CHANGES IN FEDERAL, STATE AND LOCAL LEGISLATION. FOR EXAMPLE, SOME OF OUR TENANTS MAY NOT RENEW EXPIRING LEASES, AND WE MAY BE UNABLE TO LOCATE NEW TENANTS TO MAINTAIN THE HISTORICAL OCCUPANCY RATES OF OUR PROPERTIES; RENTS THAT WE CAN CHARGE AT OUR PROPERTIES MAY DECLINE; OUR TENANTS MAY EXPERIENCE LOSSES AND BECOME UNABLE TO PAY OUR RENTS; AND WE MAY BE UNABLE TO IDENTIFY PROPERTIES WHICH WE WANT TO BUY OR TO NEGOTIATE ACCEPTABLE PURCHASE PRICES. THESE RESULTS COULD OCCUR DUE TO MANY DIFFERENT CIRCUMSTANCES, SOME OF WHICH, SUCH AS CHANGES IN OUR TENANTS’ FINANCIAL CONDITIONS OR NEEDS FOR LEASED SPACE, OR CHANGES IN THE CAPITAL MARKETS OR THE ECONOMY GENERALLY, ARE BEYOND OUR CONTROL. YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS. EXCEPT AS MAY BE REQUIRED BY LAW, WE DO NOT INTEND TO IMPLY THAT WE WILL UPDATE OR REVISE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
3
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
COMPANY PROFILE
The Company:
HRPT Properties Trust, or HRPT, is a real estate investment trust, or REIT, which primarily owns office buildings located throughout the United States. The majority of our properties are commercial office buildings located in central business district, or CBD, and suburban areas of major metropolitan markets. At September 30, 2005, we also owned approximately 18 million square feet of leased industrial and commercial lands in Oahu, Hawaii. We have large concentrations of properties leased to the U.S. Government and medical related tenants. We have been investment grade rated since 1994 and we are included in a number of financial indices, including the Russell 1000®, the MSCI US REIT Index and the S&P REIT Composite Index.
Strategy:
Our primary business strategy is to efficiently operate our properties to maintain high occupancies, at market rates, with high credit quality tenants. It is our goal to maintain an investment portfolio that is balanced between “security” and “growth”. The security part of our portfolio includes properties that are long term leased or leased to tenants we believe are likely to renew their occupancy, such as government agencies, tenants in medical related industries and our leased lands in Hawaii. The growth part of our portfolio includes our multi-tenant commercial office buildings, which we believe will generate higher rents and appreciate in value in the future because of their physical qualities and locations. We also consider our minority holdings in shares of our former subsidiaries to be part of our growth portfolio. Although we sometimes sell properties, we consider ourselves to be a long term investor and are more interested in the long term earnings potential of our properties than selling properties for short term gains. We currently do not have any investments in joint venture or off balance sheet entities. We generally do not undertake speculative development, but we will sometimes do a build to suit project for an existing tenant.
Management:
HRPT is managed by Reit Management & Research LLC, or RMR. RMR was founded in 1986 to manage public investments in real estate. As of September 30, 2005, RMR managed one of the largest portfolios of publicly owned real estate in the United States, including approximately 900 properties, with approximately 85.0 million square feet, located in 42 states, Washington, DC, Puerto Rico and Ontario, Canada. RMR has approximately 400 employees in its headquarters and regional offices located throughout the country. In addition to managing HRPT, RMR and its affiliates also manage Hospitality Properties Trust, a publicly traded REIT that owns hotels, Senior Housing Properties Trust, a publicly traded REIT that owns senior living properties and four mutual funds which invest in unaffiliated real estate companies. The public companies managed by RMR had combined total market capitalization of approximately $12.0 billion as of September 30, 2005. We believe that being managed by RMR is a competitive advantage for HRPT because RMR provides HRPT with a depth of management and experience which may be unequaled in the real estate industry. We also believe RMR is able to provide management services to HRPT at costs that are lower than HRPT would have to pay for similar quality services.
Corporate Headquarters:
400 Centre Street
Newton, MA 02458
(t) (617) 332-3990
(f) (617) 332-2261
Stock Exchange Listing:
New York Stock Exchange
Trading Symbols:
Common Stock — HRP
Preferred Stock Series A — HRP-A
Preferred Stock Series B — HRP-B
Senior Unsecured Debt Ratings:
Moody’s — Baa2
Standard & Poor’s — BBB
Portfolio Data (as of 9/30/05):
Total properties | | 434 | |
Total sq. ft. (000s) | | 54,132 | |
Percent leased | | 93.9 | % |
Portfolio Concentration by Sq. Ft. (as of 9/30/05):
| | Office | | Industrial | | Total | |
CBD | | 21.0 | % | 0.3 | % | 21.3 | % |
Suburban | | 35.1 | % | 43.6 | % | 78.7 | % |
Total | | 56.1 | % | 43.9 | % | 100.0 | % |
Portfolio Concentration by NOI (Q3 2005) (1):
| | Office | | Industrial | | Total | |
CBD | | 36.2 | % | 0.2 | % | 36.4 | % |
Suburban | | 46.5 | % | 17.1 | % | 63.6 | % |
Total | | 82.7 | % | 17.3 | % | 100.0 | % |
Portfolio Concentration by Major Market:
| | 9/30/05 | | Q3 2005 | |
| | Sq. Ft. | | NOI (1) | |
Metro Philadelphia, PA | | 10.1 | % | 16.4 | % |
Metro Washington, DC | | 4.9 | % | 11.1 | % |
Oahu, HI | | 33.0 | % | 10.1 | % |
Metro Boston, MA | | 5.1 | % | 8.8 | % |
Southern California | | 2.7 | % | 7.6 | % |
Metro Atlanta, GA | | 4.0 | % | 4.8 | % |
Metro Austin, TX | | 5.2 | % | 3.8 | % |
Other Markets | | 35.0 | % | 37.4 | % |
Total | | 100.0 | % | 100.0 | % |
(1) We compute NOI, or property net operating income, as rental income from real estate less property operating expenses; NOI excludes income from other investments.
5
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
INVESTOR INFORMATION
Board of Trustees |
| | |
Barry M. Portnoy | | Gerard M. Martin |
Managing Trustee | | Managing Trustee |
| | |
Patrick F. Donelan | | Frederick N. Zeytoonjian |
Independent Trustee | | Independent Trustee |
| | |
Tjarda Clagett | | |
Independent Trustee | | |
| | |
Senior Management |
| | |
John A. Mannix | | Adam D. Portnoy |
President and Chief Operating Officer | | Executive Vice President |
| | |
John C. Popeo | | Jennifer B. Clark |
Treasurer, Chief Financial Officer and Secretary | | Senior Vice President |
| | |
David M. Lepore | | |
Senior Vice President | | |
| | |
Contact Information |
| | |
Investor Relations | | Inquiries |
HRPT Properties Trust | | Financial inquiries should be directed to John C. Popeo, |
400 Centre Street | | Treasurer and Chief Financial Officer, at (617) 332-3990 |
Newton, MA 02458 | | or jpopeo@reitmr.com. |
(t) (617) 332-3990 | | |
(f) (617) 332-2261 | | Investor and media inquiries should be directed to |
(email) info@hrpreit.com | | Timothy A. Bonang, Manager of Investor Relations, at |
(website) www.hrpreit.com | | (617) 796-8149 or tbonang@reitmr.com. |
6
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
RESEARCH COVERAGE
Equity Research Coverage |
| | |
A.G. Edwards & Sons | | RBC Capital Markets |
David Aubuchon | | Jay Leupp |
(314) 955-5452 | | (415) 633-8588 |
| | |
Legg Mason | | Smith Barney Citigroup |
John Guinee | | John Stewart |
(410) 454-5520 | | (212) 816-1685 |
| | |
Merrill Lynch | | Stifel, Nicolaus |
Steve Sakwa | | Phillip Martin |
(212) 449-0335 | | (312) 454-3985 |
| | |
Raymond James | | Wachovia Securities |
Paul Puryear | | Stephen Swett |
(727) 573-3800 | | (212) 909-0954 |
| | |
Debt Research Coverage |
| | |
Banc of America Securities | | Credit Suisse First Boston |
Chris Brown | | Thierry Perrein |
(704) 386-2524 | | (212) 538-8618 |
| | |
Bear Stearns & Company | | Merrill Lynch |
Susan Berliner | | John Forrey |
(212) 272-3824 | | (212) 449-1812 |
| | |
Citigroup | | Wachovia Securities |
Thomas Cook | | Dan Sullivan |
(212) 723-1112 | | (703) 383-6441 |
| | |
Rating Agencies |
| | |
Moody’s Investor Service | | Standard and Poor’s |
Karen Nickerson | | Linda Phelps |
(212) 553-4924 | | (212) 438-3059 |
HRPT is followed by the analysts and its publicly held debt and preferred shares are rated by the rating agencies listed above. Please note that any opinions, estimates or forecasts regarding HRPT’s performance made by these analysts or agencies do not represent opinions, forecasts or predictions of HRPT or its management. HRPT does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts or agencies.
7
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
KEY FINANCIAL DATA
(amounts in thousands, except per share data)
| | As of and For the Three Months Ended | |
| | 9/30/2005 | | 6/30/2005 | | 3/31/2005 | | 12/31/2004 | | 9/30/2004 | |
| | | | | | | | | | | |
Shares Outstanding: | | | | | | | | | | | |
Common shares outstanding (at end of period) | | 209,861 | | 199,821 | | 199,817 | | 177,317 | | 177,317 | |
Preferred shares outstanding (at end of period) | | 20,000 | | 20,000 | | 20,000 | | 20,000 | | 20,000 | |
Weighted average common shares and units outstanding - basic | | 201,459 | | 199,819 | | 179,817 | | 177,317 | | 177,285 | |
Weighted average common shares and units outstanding - diluted (1) | | 201,459 | | 199,819 | | 179,817 | | 177,317 | | 177,285 | |
| | | | | | | | | | | |
Common Share Data: | | | | | | | | | | | |
Price at end of period | | $ | 12.41 | | $ | 12.43 | | $ | 11.91 | | $ | 12.83 | | $ | 10.99 | |
High during period | | $ | 13.25 | | $ | 12.60 | | $ | 13.20 | | $ | 12.99 | | $ | 11.07 | |
Low during period | | $ | 11.75 | | $ | 11.35 | | $ | 10.95 | | $ | 10.96 | | $ | 9.86 | |
Annualized dividends paid per share | | $ | 0.84 | | $ | 0.84 | | $ | 0.84 | | $ | 0.84 | | $ | 0.84 | |
Annualized dividend yield (at end of period) | | 6.8 | % | 6.8 | % | 7.1 | % | 6.5 | % | 7.6 | % |
| | | | | | | | | | | |
Market Capitalization: | | | | | | | | | | | |
Total debt (book value) | | $ | 2,333,543 | | $ | 2,310,524 | | $ | 2,157,568 | | $ | 2,355,031 | | $ | 2,272,430 | |
Plus: market value of preferred shares (at end of period) | | 523,880 | | 533,600 | | 530,280 | | 548,440 | | 545,480 | |
Plus: market value of common shares (at end of period) | | 2,604,375 | | 2,483,775 | | 2,379,820 | | 2,274,977 | | 1,948,714 | |
Total market capitalization | | $ | 5,461,798 | | $ | 5,327,899 | | $ | 5,067,668 | | $ | 5,178,448 | | $ | 4,766,624 | |
Total debt / total market capitalization | | 42.7 | % | 43.4 | % | 42.6 | % | 45.5 | % | 47.7 | % |
| | | | | | | | | | | |
Book Capitalization: | | | | | | | | | | | |
Total debt | | $ | 2,333,543 | | $ | 2,310,524 | | $ | 2,157,568 | | $ | 2,355,031 | | $ | 2,272,430 | |
Plus: total stockholders’ equity | | 2,657,350 | | 2,547,047 | | 2,549,709 | | 2,307,194 | | 2,313,937 | |
Total book capitalization | | $ | 4,990,893 | | $ | 4,857,571 | | $ | 4,707,277 | | $ | 4,662,225 | | $ | 4,586,367 | |
Total debt / total book capitalization | | 46.8 | % | 47.6 | % | 45.8 | % | 50.5 | % | 49.5 | % |
| | | | | | | | | | | |
Selected Balance Sheet Data: | | | | | | | | | | | |
Total assets | | $ | 5,154,048 | | $ | 5,012,423 | | $ | 4,823,683 | | $ | 4,813,330 | | $ | 4,752,257 | |
Total liabilities | | $ | 2,496,698 | | $ | 2,465,376 | | $ | 2,273,974 | | $ | 2,506,136 | | $ | 2,438,320 | |
Gross book value of real estate assets (2) | | $ | 5,210,972 | | $ | 5,052,720 | | $ | 4,831,691 | | $ | 4,814,514 | | $ | 4,709,543 | |
Equity investments in former subsidiaries (book value) | | $ | 205,498 | | $ | 207,655 | | $ | 205,547 | | $ | 207,804 | | $ | 218,174 | |
Total debt / gross book value of real estate plus equity investments in former subsidiaries (2) | | 43.1 | % | 43.9 | % | 42.8 | % | 46.9 | % | 46.1 | % |
| | | | | | | | | | | |
Selected Income Statement Data: | | | | | | | | | | | |
Rental income | | $ | 183,372 | | $ | 174,289 | | $ | 167,031 | | $ | 167,389 | | $ | 158,347 | |
EBITDA (3) | | $ | 115,921 | | $ | 112,613 | | $ | 105,939 | | $ | 105,105 | | $ | 102,375 | |
Property net operating income (NOI) (4) | | $ | 114,005 | | $ | 110,369 | | $ | 103,748 | | $ | 102,502 | | $ | 98,222 | |
NOI margin (5) | | 62.2 | % | 63.3 | % | 62.1 | % | 61.2 | % | 62.0 | % |
Net income | | $ | 38,297 | | $ | 50,746 | | $ | 32,235 | | $ | 41,993 | | $ | 36,401 | |
Preferred distributions | | $ | (11,500 | ) | $ | (11,500 | ) | $ | (11,500 | ) | $ | (11,500 | ) | $ | (11,500 | ) |
Net income available for common shareholders | | $ | 26,797 | | $ | 39,246 | | $ | 20,735 | | $ | 30,493 | | $ | 24,901 | |
Funds from operations (FFO) (6) | | $ | 76,438 | | $ | 76,338 | | $ | 68,243 | | $ | 67,493 | | $ | 69,071 | |
FFO available for common shareholders (6) | | $ | 64,938 | | $ | 64,838 | | $ | 56,743 | | $ | 55,993 | | $ | 57,571 | |
Common distributions paid | | $ | 41,963 | | $ | 41,961 | | $ | 37,237 | | $ | 37,236 | | $ | 37,229 | |
| | | | | | | | | | | |
Per Share Data: | | | | | | | | | | | |
Net income available for common shareholders | | $ | 0.13 | | $ | 0.20 | | $ | 0.12 | | $ | 0.17 | | $ | 0.14 | |
FFO available for common shareholders | | $ | 0.32 | | $ | 0.32 | | $ | 0.32 | | $ | 0.32 | | $ | 0.32 | |
Common distributions paid | | $ | 0.21 | | $ | 0.21 | | $ | 0.21 | | $ | 0.21 | | $ | 0.21 | |
FFO payout ratio | | 65.6 | % | 65.6 | % | 65.6 | % | 65.6 | % | 65.6 | % |
| | | | | | | | | | | |
Coverage Ratios: | | | | | | | | | | | |
EBITDA (3) / interest expense | | 3.3 | x | 3.2 | x | 3.0 | x | 3.0 | x | 3.3 | x |
EBITDA (3) / interest expense and preferred distributions | | 2.5 | x | 2.4 | x | 2.2 | x | 2.2 | x | 2.4 | x |
(1) HRPT has no outstanding common share equivalents, such as units, convertible debt or stock options.
(2) Gross book value of real estate assets is real estate properties, at cost, including purchase price allocations relating to FAS 141.
(3) See page 13 for calculation of EBITDA.
(4) Property net operating income, or NOI, is defined as rental income from real estate less property operating expenses; NOI excludes income from other investments.
(5) NOI margin is defined as property net operating income, or NOI, as a percentage of rental income.
(6) See page 14 for calculation of FFO and FFO available for common shareholders.
9
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
| | As of
September 30,
2005 | | As of
December 31,
2004 | |
| | | | (audited) | |
ASSETS | | | | | |
Real estate properties: | | | | | |
Land | | $ | 1,062,223 | | $ | 928,106 | |
Buildings and improvements | | 3,999,891 | | 3,756,963 | |
| | 5,062,114 | | 4,685,069 | |
Accumulated depreciation | | (534,337 | ) | (454,411 | ) |
| | 4,527,777 | | 4,230,658 | |
Acquired real estate leases | | 150,761 | | 149,063 | |
Equity investments in former subsidiaries | | 205,498 | | 207,804 | |
Cash and cash equivalents | | 21,514 | | 21,961 | |
Restricted cash | | 17,095 | | 22,257 | |
Rents receivable, net of allowance for doubtful accounts of $3,688 and $4,594, respectively | | 134,921 | | 113,504 | |
Other assets, net | | 96,482 | | 68,083 | |
Total assets | | $ | 5,154,048 | | $ | 4,813,330 | |
| | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
Revolving credit facility | | $ | 346,000 | | $ | 175,000 | |
Senior unsecured debt, net | | 1,640,455 | | 1,739,624 | |
Mortgage notes payable, net | | 347,088 | | 440,407 | |
Accounts payable and accrued expenses | | 64,993 | | 67,716 | |
Acquired real estate lease obligations | | 38,753 | | 39,843 | |
Rent collected in advance | | 20,060 | | 15,208 | |
Security deposits | | 13,536 | | 11,920 | |
Due to affiliates | | 25,813 | | 16,418 | |
Total liabilities | | 2,496,698 | | 2,506,136 | |
| | | | | |
Shareholders’ equity: | | | | | |
Preferred shares of beneficial interest, $0.01 par value: | | | | | |
50,000,000 shares authorized; | | | | | |
Series A preferred shares; 9 7/8% cumulative, redeemable at par on February 22, 2006; 8,000,000 shares outstanding, aggregate liquidation preference $200,000 | | 193,086 | | 193,086 | |
Series B preferred shares; 8 3/4% cumulative, redeemable at par on September 12, 2007; 12,000,000 shares outstanding, aggregate liquidation preference $300,000 | | 289,849 | | 289,849 | |
Common shares of beneficial interest, $0.01 par value: | | | | | |
250,000,000 shares authorized; 209,860,625 and 177,316,525 shares outstanding, respectively | | 2,099 | | 1,773 | |
Additional paid in capital | | 2,779,159 | | 2,394,946 | |
Cumulative net income | | 1,409,068 | | 1,287,790 | |
Cumulative common distributions | | (1,850,748 | ) | (1,729,587 | ) |
Cumulative preferred distributions | | (165,163 | ) | (130,663 | ) |
Total shareholders’ equity | | 2,657,350 | | 2,307,194 | |
Total liabilities and shareholders’ equity | | $ | 5,154,048 | | $ | 4,813,330 | |
10
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share data)
| | For the Three Months Ended | | For the Nine Months Ended | |
| | 9/30/2005 | | 9/30/2004 | | 9/30/2005 | | 9/30/2004 | |
| | | | | | | | | |
Rental income (1) | | $ | 183,372 | | $ | 158,347 | | $ | 524,692 | | $ | 433,368 | |
| | | | | | | | | |
Expenses: | | | | | | | | | |
Operating expenses | | 69,367 | | 60,125 | | 196,570 | | 162,404 | |
Depreciation and amortization | | 34,595 | | 29,090 | | 100,729 | | 78,969 | |
General and administrative | | 9,102 | | 6,946 | | 23,430 | | 18,474 | |
Total expenses | | 113,064 | | 96,161 | | 320,729 | | 259,847 | |
| | | | | | | | | |
Operating income | | 70,308 | | 62,186 | | 203,963 | | 173,521 | |
| | | | | | | | | |
Interest income | | 408 | | 190 | | 1,289 | | 454 | |
Interest expense (including amortization of note discounts and premiums and deferred financing fees of $392, $640, $1,725 and $3,586, respectively) | | (35,628 | ) | (31,423 | ) | (105,967 | ) | (82,849 | ) |
Loss on early extinguishment of debt | | (168 | ) | — | | (168 | ) | (2,866 | ) |
Equity in earnings of equity investments | | 3,494 | | 3,604 | | 9,940 | | 11,135 | |
Gain on sale of shares of equity investments (2) | | — | | — | | — | | 14,805 | |
Gain on issuance of shares by equity investees (2) | | — | | — | | 4,708 | | 5,040 | |
Income from continuing operations | | 38,414 | | 34,557 | | 113,765 | | 119,240 | |
(Loss) income from discontinued operations | | (117 | ) | 1,844 | | (79 | ) | 1,596 | |
Gain on sale of properties | | — | | — | | 7,592 | | — | |
Net income | | 38,297 | | 36,401 | | 121,278 | | 120,836 | |
Preferred distributions | | (11,500 | ) | (11,500 | ) | (34,500 | ) | (34,500 | ) |
Net income available for common shareholders | | $ | 26,797 | | $ | 24,901 | | $ | 86,778 | | $ | 86,336 | |
| | | | | | | | | |
Weighted average common shares outstanding | | 201,459 | | 177,285 | | 193,778 | | 175,768 | |
| | | | | | | | | |
Basic and diluted earnings per common share: | | | | | | | | | |
Income from continuing operations | | $ | 0.13 | | $ | 0.13 | | $ | 0.41 | | $ | 0.48 | |
Net income available for common shareholders | | $ | 0.13 | | $ | 0.14 | | $ | 0.45 | | $ | 0.49 | |
| | | | | | | | | |
Additional Data: | | | | | | | | | |
General and administrative expenses / rental income | | 4.96 | % | 4.39 | % | 4.47 | % | 4.26 | % |
General and administrative expenses / total assets (at end of period) | | 0.18 | % | 0.15 | % | 0.45 | % | 0.39 | % |
| | | | | | | | | |
Non cash straight line rent adjustments (FAS 13) (1) | | $ | 9,006 | | $ | 5,739 | | $ | 21,256 | | $ | 14,976 | |
Lease value amortization (FAS 141) (1) | | $ | (1,544 | ) | $ | (1,143 | ) | $ | (5,011 | ) | $ | (1,123 | ) |
Lease termination fees included in rental income | | $ | 3,100 | | $ | 1,027 | | $ | 3,535 | | $ | 2,239 | |
Capitalized interest expense | | $ | — | | $ | — | | $ | — | | $ | — | |
(1) We report rental income on a straight line basis over the terms of the respective leases. Rental income includes non-cash straight line rent adjustments. Rental income also includes non-cash amortization of intangible lease assets and liabilities.
(2) We account for our common share investments in Senior Housing Properties Trust, or Senior Housing, and Hospitality Properties Trust, or Hospitality Properties, using the equity method of accounting. During the nine months ended September 30, 2004, we sold 3,148 of our Senior Housing common shares and recognized a gain of $14,805. In addition, we recognized gains of $4,708 and $5,040 during the nine months ended September 30, 2005 and 2004, respectively, as a result of share issuances by Senior Housing and Hospitality Properties at prices above our per share carrying value.
11
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
| | For the Three Months Ended | | For the Nine Months Ended | |
| | 9/30/2005 | | 9/30/2004 | | 9/30/2005 | | 9/30/2004 | |
Cash flows from operating activities: | | | | | | | | | |
Net income | | $ | 38,297 | | $ | 36,401 | | $ | 121,278 | | $ | 120,836 | |
Adjustments to reconcile net income to cash provided by operating activities: | | | | | | | | | |
Depreciation | | 27,928 | | 24,559 | | 82,806 | | 68,187 | |
Amortization of note discounts and premiums and deferred financing fees | | 392 | | 640 | | 1,725 | | 3,586 | |
Amortization of acquired real estate leases | | 5,970 | | 4,243 | | 16,625 | | 7,917 | |
Other amortization | | 2,240 | | 1,534 | | 6,484 | | 4,303 | |
Loss on early extinguishment of debt | | — | | — | | — | | 2,866 | |
Equity in earnings of equity investments | | (3,494 | ) | (3,604 | ) | (9,940 | ) | (11,135 | ) |
Gain on sale of shares of equity investments | | — | | — | | — | | (14,805 | ) |
Gain on issuance of shares by equity investees | | — | | — | | (4,708 | ) | (5,040 | ) |
Distributions of earnings from equity investments | | 3,494 | | 3,604 | | 9,940 | | 11,135 | |
Gain on sale of properties | | — | | — | | (7,592 | ) | — | |
Change in assets and liabilities: | | | | | | | | | |
Decrease (increase) in restricted cash | | 5,187 | | (12,045 | ) | 5,162 | | (11,490 | ) |
Increase in rents receivable and other assets | | (25,397 | ) | (8,697 | ) | (54,518 | ) | (50,543 | ) |
(Decrease) increase in accounts payable and accrued expenses | | (8,144 | ) | 4,967 | | (2,715 | ) | 6,971 | |
Increase in rent collected in advance | | 2,012 | | 3,372 | | 4,852 | | 3,490 | |
Increase in security deposits | | 818 | | 1,786 | | 1,759 | | 1,990 | |
Increase in due to affiliates | | 14,360 | | 24,525 | | 9,396 | | 22,450 | |
Cash provided by operating activities | | 63,663 | | 81,285 | | 180,554 | | 160,718 | |
| | | | | | | | | |
Cash flows from investing activities: | | | | | | | | | |
Real estate acquisitions and improvements | | (158,252 | ) | (585,702 | ) | (411,277 | ) | (663,088 | ) |
Distributions in excess of earnings from equity investments | | 2,157 | | 2,271 | | 7,014 | | 7,466 | |
Proceeds from sale of properties | | — | | — | | 20,078 | | — | |
Proceeds from sale of common shares of equity investment | | — | | — | | — | | 54,413 | |
Cash used for investing activities | | (156,095 | ) | (583,431 | ) | (384,185 | ) | (601,209 | ) |
| | | | | | | | | |
Cash flows from financing activities: | | | | | | | | | |
Proceeds from issuance of common shares, net | | 124,957 | | — | | 383,974 | | 323,639 | |
Proceeds from borrowings | | 242,000 | | 1,075,436 | | 622,000 | | 1,547,436 | |
Payments on borrowings | | (218,401 | ) | (513,675 | ) | (642,248 | ) | (1,266,920 | ) |
Deferred financing fees | | (68 | ) | (3,870 | ) | (4,881 | ) | (5,983 | ) |
Distributions to common shareholders | | (41,963 | ) | (37,229 | ) | (121,161 | ) | (108,138 | ) |
Distributions to preferred shareholders | | (11,500 | ) | (11,500 | ) | (34,500 | ) | (34,500 | ) |
Cash provided by financing activities | | 95,025 | | 509,162 | | 203,184 | | 455,534 | |
| | | | | | | | | |
Increase (decrease) in cash and cash equivalents | | 2,593 | | 7,016 | | (447 | ) | 15,043 | |
Cash and cash equivalents at beginning of period | | 18,921 | | 19,553 | | 21,961 | | 11,526 | |
Cash and cash equivalents at end of period | | $ | 21,514 | | $ | 26,569 | | $ | 21,514 | | $ | 26,569 | |
| | | | | | | | | |
Supplemental cash flow information: | | | | | | | | | |
Interest paid | | $ | 48,595 | | $ | 34,642 | | $ | 120,666 | | $ | 81,387 | |
| | | | | | | | | |
Non-cash investing activities: | | | | | | | | | |
Real estate acquisitions | | $ | — | | $ | (114,377 | ) | $ | — | | $ | (114,377 | ) |
| | | | | | | | | |
Non-cash financing activities: | | | | | | | | | |
Issuance of common shares | | $ | 512 | | $ | 409 | | $ | 565 | | $ | 449 | |
Assumption of notes payable | | — | | 114,377 | | — | | 114,377 | |
12
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
CALCULATION OF EBITDA
(dollars in thousands)
| | For the Three Months Ended | | For the Nine Months Ended | |
| | 9/30/2005 | | 9/30/2004 | | 9/30/2005 | | 9/30/2004 | |
| | | | | | | | | |
Net income | | $ | 38,297 | | $ | 36,401 | | $ | 121,278 | | $ | 120,836 | |
Plus: interest expense | | 35,628 | | 31,423 | | 105,967 | | 82,849 | |
Plus: income taxes | | — | | — | | — | | — | |
Plus: depreciation and amortization | | 34,595 | | 29,192 | | 100,905 | | 79,283 | |
Plus: loss on early extinguishment of debt | | 168 | | — | | 168 | | 2,866 | |
Less: gain on sale of properties | | — | | — | | (7,592 | ) | — | |
Less: gain on sale of shares of equity investments | | — | | — | | — | | (14,805 | ) |
Less: gain on issuance of shares by equity investees | | — | | — | | (4,708 | ) | (5,040 | ) |
Less: equity in earnings of equity investments | | (3,494 | ) | (3,604 | ) | (9,940 | ) | (11,135 | ) |
Plus: EBITDA from equity investments | | 10,727 | | 8,963 | | 28,395 | | 27,722 | |
EBITDA | | $ | 115,921 | | $ | 102,375 | | $ | 334,473 | | $ | 282,576 | |
We compute EBITDA, or earnings before interest, taxes, depreciation and amortization, as net income less gains on equity transactions of equity investments and gains on sales of properties, plus loss on early extinguishment of debt, interest expense, depreciation and amortization and the difference between EBITDA and earnings from equity investments. We consider EBITDA to be an appropriate measure of our performance, along with net income and cash flow from operating, investing and financing activities. We believe EBITDA provides useful information to investors because by excluding the effects of certain historical costs, such as interest, depreciation and amortization expense, EBITDA can facilitate a comparison of our current operating performance with our past operating performance and of operating performance among REITs. EBITDA does not represent cash generated by operating activities in accordance with generally accepted accounting principles, or GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity.
13
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
CALCULATION OF FUNDS FROM OPERATIONS (FFO)
(amounts in thousands, except per share data)
| | For the Three Months Ended | | For the Nine Months Ended | |
| | 9/30/2005 | | 9/30/2004 | | 9/30/2005 | | 9/30/2004 | |
| | | | | | | | | |
Net income | | $ | 38,297 | | $ | 36,401 | | $ | 121,278 | | $ | 120,836 | |
Plus: depreciation and amortization | | 34,595 | | 29,192 | | 100,905 | | 79,283 | |
Loss on early extinguishment of debt: | | | | | | | | | |
Add: amount included in expenses | | 168 | | — | | 168 | | 2,866 | |
Less: portion settled in cash | | (168 | ) | — | | (168 | ) | — | |
Less: gain on sale of properties | | — | | — | | (7,592 | ) | — | |
Less: gain on sale of shares of equity investments | | — | | — | | — | | (14,805 | ) |
Less: gain on issuance of shares by equity investees | | — | | — | | (4,708 | ) | (5,040 | ) |
Less: equity in earnings of equity investments | | (3,494 | ) | (3,604 | ) | (9,940 | ) | (11,135 | ) |
Plus: FFO from equity investments | | 7,040 | | 7,082 | | 21,076 | | 21,707 | |
FFO | | 76,438 | | 69,071 | | 221,019 | | 193,712 | |
Less: preferred distributions | | (11,500 | ) | (11,500 | ) | (34,500 | ) | (34,500 | ) |
FFO available for common shareholders | | $ | 64,938 | | $ | 57,571 | | $ | 186,519 | | $ | 159,212 | |
| | | | | | | | | |
Weighted average shares outstanding | | 201,459 | | 177,285 | | 193,778 | | 175,768 | |
| | | | | | | | | |
FFO available for common shareholders per share | | $ | 0.32 | | $ | 0.32 | | $ | 0.96 | | $ | 0.91 | |
We compute FFO and FFO available for common shareholders as shown above. Our calculation of FFO differs from the National Association of Real Estate Investment Trusts, or NAREIT, definition because we add loss on early extinguishment of debt unless settled in cash. We consider FFO to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities. We believe that FFO provides useful information to investors because by excluding the effects of certain historical costs, such as depreciation expense and gains or losses on sales of properties, FFO can facilitate a comparison of current operating performance among REITs. FFO does not represent cash generated by operating activities in accordance with generally accepted accounting principles, or GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity. FFO is one important factor considered by our Board of Trustees in determining the amount of distributions to shareholders. Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our revolving bank credit facility and public debt covenants, the availability of debt and equity capital to us and our expectations of future capital requirements and operating performance.
14
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
SUMMARY RESULTS OF OPERATIONS BY PROPERTY TYPE
(dollars and sq. ft. in thousands)
| | As of and For the Three Months Ended | | As of and For the Nine Months Ended | |
| | 9/30/2005 | | 9/30/2004 | | 9/30/2005 | | 9/30/2004 | |
| | | | | | | | | |
Number of Properties: | | | | | | | | | |
| | | | | | | | | |
Office | | 299 | | 270 | | 299 | | 270 | |
Industrial | | 135 | | 95 | | 135 | | 95 | |
Total | | 434 | | 365 | | 434 | | 365 | |
| | | | | | | | | |
CBD | | 51 | | 50 | | 51 | | 50 | |
Suburban | | 383 | | 315 | | 383 | | 315 | |
Total | | 434 | | 365 | | 434 | | 365 | |
| | | | | | | | | |
Square Feet (1): | | | | | | | | | |
| | | | | | | | | |
Office | | 30,364 | | 27,999 | | 30,364 | | 27,999 | |
Industrial | | 23,768 | | 15,334 | | 23,768 | | 15,334 | |
Total | | 54,132 | | 43,333 | | 54,132 | | 43,333 | |
| | | | | | | | | |
CBD | | 11,523 | | 10,908 | | 11,523 | | 10,908 | |
Suburban | | 42,609 | | 32,425 | | 42,609 | | 32,425 | |
Total | | 54,132 | | 43,333 | | 54,132 | | 43,333 | |
| | | | | | | | | |
Percent Leased (2): | | | | | | | | | |
| | | | | | | | | |
Office | | 91.9 | % | 91.6 | % | 91.9 | % | 91.6 | % |
Industrial | | 96.5 | % | 95.8 | % | 96.5 | % | 95.8 | % |
Total | | 93.9 | % | 93.1 | % | 93.9 | % | 93.1 | % |
| | | | | | | | | |
CBD | | 92.8 | % | 94.8 | % | 92.8 | % | 94.8 | % |
Suburban | | 94.2 | % | 92.5 | % | 94.2 | % | 92.5 | % |
Total | | 93.9 | % | 93.1 | % | 93.9 | % | 93.1 | % |
| | | | | | | | | |
Rental Income (3): | | | | | | | | | |
| | | | | | | | | |
Office | | $ | 155,458 | | $ | 135,855 | | $ | 447,130 | | $ | 375,368 | |
Industrial | | 27,914 | | 22,492 | | 77,562 | | 58,000 | |
Total | | $ | 183,372 | | $ | 158,347 | | $ | 524,692 | | $ | 433,368 | |
| | | | | | | | | |
CBD | | $ | 72,939 | | $ | 69,061 | | $ | 209,232 | | $ | 200,383 | |
Suburban | | 110,433 | | 89,286 | | 315,460 | | 232,985 | |
Total | | $ | 183,372 | | $ | 158,347 | | $ | 524,692 | | $ | 433,368 | |
| | | | | | | | | |
Net Operating Income (NOI) (4): | | | | | | | | | |
| | | | | | | | | |
Office | | $ | 94,255 | | $ | 82,305 | | $ | 273,661 | | $ | 228,798 | |
Industrial | | 19,750 | | 15,917 | | 54,461 | | 42,166 | |
Total | | $ | 114,005 | | $ | 98,222 | | $ | 328,122 | | $ | 270,964 | |
| | | | | | | | | |
CBD | | $ | 41,461 | | $ | 40,461 | | $ | 120,109 | | $ | 117,615 | |
Suburban | | 72,544 | | 57,761 | | 208,013 | | 153,349 | |
Total | | $ | 114,005 | | $ | 98,222 | | $ | 328,122 | | $ | 270,964 | |
| | | | | | | | | |
NOI Margin (5): | | | | | | | | | |
| | | | | | | | | |
Office | | 60.6 | % | 60.6 | % | 61.2 | % | 61.0 | % |
Industrial | | 70.8 | % | 70.8 | % | 70.2 | % | 72.7 | % |
Total | | 62.2 | % | 62.0 | % | 62.5 | % | 62.5 | % |
| | | | | | | | | |
CBD | | 56.8 | % | 58.6 | % | 57.4 | % | 58.7 | % |
Suburban | | 65.7 | % | 64.7 | % | 65.9 | % | 65.8 | % |
Total | | 62.2 | % | 62.0 | % | 62.5 | % | 62.5 | % |
(1) Prior periods exclude space remeasurements made during the current period.
(2) Percent leased includes (i) space being fitted out for occupancy pursuant to signed leases and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants.
(3) Includes some triple net lease rental income. Excludes rental income from discontinued operations.
(4) Net operating income, or NOI, is defined as property rental income less property operating expenses. Excludes NOI from discontinued operations.
(5) NOI margin is defined as net operating income, or NOI, as a percentage of rental income.
15
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
SUMMARY RESULTS OF OPERATIONS BY MAJOR MARKET
(dollars and sq. ft. in thousands)
| | As of and For the Three Months Ended | | As of and For the Nine Months Ended | |
| | 9/30/2005 | | 9/30/2004 | | 9/30/2005 | | 9/30/2004 | |
Number of Properties: | | | | | | | | | |
Metro Philadelphia, PA | | 21 | | 21 | | 21 | | 21 | |
Metro Washington, DC | | 20 | | 20 | | 20 | | 20 | |
Oahu, HI | | 53 | | 11 | | 53 | | 11 | |
Metro Boston, MA | | 36 | | 39 | | 36 | | 39 | |
Southern California | | 24 | | 24 | | 24 | | 24 | |
Metro Atlanta, GA | | 45 | | 36 | | 45 | | 36 | |
Metro Austin, TX | | 26 | | 26 | | 26 | | 26 | |
Other markets | | 209 | | 188 | | 209 | | 188 | |
Total | | 434 | | 365 | | 434 | | 365 | |
| | | | | | | | | |
Square Feet (1): | | | | | | | | | |
Metro Philadelphia, PA | | 5,454 | | 5,471 | | 5,454 | | 5,471 | |
Metro Washington, DC | | 2,645 | | 2,648 | | 2,645 | | 2,648 | |
Oahu, HI | | 17,879 | | 9,755 | | 17,879 | | 9,755 | |
Metro Boston, MA | | 2,738 | | 2,976 | | 2,738 | | 2,976 | |
Southern California | | 1,444 | | 1,444 | | 1,444 | | 1,444 | |
Metro Atlanta, GA | | 2,186 | | 1,840 | | 2,186 | | 1,840 | |
Metro Austin, TX | | 2,806 | | 2,810 | | 2,806 | | 2,810 | |
Other markets | | 18,980 | | 16,389 | | 18,980 | | 16,389 | |
Total | | 54,132 | | 43,333 | | 54,132 | | 43,333 | |
| | | | | | | | | |
Percent Leased (2): | | | | | | | | | |
Metro Philadelphia, PA | | 93.0 | % | 95.5 | % | 93.0 | % | 95.5 | % |
Metro Washington, DC | | 95.3 | % | 93.0 | % | 95.3 | % | 93.0 | % |
Oahu, HI | | 97.6 | % | 98.8 | % | 97.6 | % | 98.8 | % |
Metro Boston, MA | | 96.8 | % | 89.3 | % | 96.8 | % | 89.3 | % |
Southern California | | 98.0 | % | 93.4 | % | 98.0 | % | 93.4 | % |
Metro Atlanta, GA | | 89.0 | % | 95.1 | % | 89.0 | % | 95.1 | % |
Metro Austin, TX | | 88.6 | % | 79.0 | % | 88.6 | % | 79.0 | % |
Other markets | | 91.2 | % | 91.7 | % | 91.2 | % | 91.7 | % |
Total | | 93.9 | % | 93.1 | % | 93.9 | % | 93.1 | % |
| | | | | | | | | |
Rental Income (3): | | | | | | | | | |
Metro Philadelphia, PA | | $ | 33,761 | | $ | 34,442 | | $ | 100,490 | | $ | 100,675 | |
Metro Washington, DC | | 19,741 | | 17,636 | | 57,461 | | 47,608 | |
Oahu, HI | | 14,462 | | 10,830 | | 36,724 | | 31,457 | |
Metro Boston, MA | | 15,093 | | 12,484 | | 43,157 | | 37,154 | |
Southern California | | 12,457 | | 10,604 | | 35,525 | | 30,654 | |
Metro Atlanta, GA | | 8,882 | | 6,371 | | 25,610 | | 6,371 | |
Metro Austin, TX | | 9,637 | | 9,929 | | 29,109 | | 29,285 | |
Other markets | | 69,339 | | 56,051 | | 196,616 | | 150,164 | |
Total | | $ | 183,372 | | $ | 158,347 | | $ | 524,692 | | $ | 433,368 | |
| | | | | | | | | |
Net Operating Income (NOI) (4): | | | | | | | | | |
Metro Philadelphia, PA | | $ | 18,641 | | $ | 19,904 | | $ | 55,509 | | $ | 56,528 | |
Metro Washington, DC | | 12,651 | | 11,400 | | 37,298 | | 30,766 | |
Oahu, HI | | 11,568 | | 8,761 | | 29,431 | | 25,870 | |
Metro Boston, MA | | 10,074 | | 8,835 | | 29,268 | | 27,138 | |
Southern California | | 8,630 | | 6,770 | | 24,093 | | 19,736 | |
Metro Atlanta, GA | | 5,497 | | 4,174 | | 16,284 | | 4,174 | |
Metro Austin, TX | | 4,352 | | 4,535 | | 13,655 | | 13,603 | |
Other markets | | 42,592 | | 33,843 | | 122,584 | | 93,149 | |
Total | | $ | 114,005 | | $ | 98,222 | | $ | 328,122 | | $ | 270,964 | |
| | | | | | | | | |
NOI Margin (5): | | | | | | | | | |
Metro Philadelphia, PA | | 55.2 | % | 57.8 | % | 55.2 | % | 56.1 | % |
Metro Washington, DC | | 64.1 | % | 64.6 | % | 64.9 | % | 64.6 | % |
Oahu, HI | | 80.0 | % | 80.9 | % | 80.1 | % | 82.2 | % |
Metro Boston, MA | | 66.7 | % | 70.8 | % | 67.8 | % | 73.0 | % |
Southern California | | 69.3 | % | 63.8 | % | 67.8 | % | 64.4 | % |
Metro Atlanta, GA | | 61.9 | % | 65.5 | % | 63.6 | % | 65.5 | % |
Metro Austin, TX | | 45.2 | % | 45.7 | % | 46.9 | % | 46.5 | % |
Other markets | | 61.4 | % | 60.4 | % | 62.3 | % | 62.0 | % |
Total | | 62.2 | % | 62.0 | % | 62.5 | % | 62.5 | % |
(1) Prior periods exclude space remeasurements made during the current period.
(2) Percent leased includes (i) space being fitted out for occupancy pursuant to signed leases and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants.
(3) Includes some triple net lease rental income. Excludes rental income from discontinued operations.
(4) Net operating income, or NOI, is defined as property rental income less property operating expenses. Excludes NOI from discontinued operations.
(5) NOI margin is defined as net operating income, or NOI, as a percentage of rental income.
Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes properties located in Wilmington, DE. Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar. Oahu, HI includes all properties located on the island of Oahu.
16
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
SAME PROPERTY RESULTS AND ANALYSIS BY PROPERTY TYPE
(dollars and sq. ft. in thousands)
| | As of and For the Three Months Ended (1) | | As of and For the Nine Months Ended (2) | |
| | 9/30/2005 | | 9/30/2004 | | 9/30/2005 | | 9/30/2004 | |
Office: | | | | | | | | | |
Properties | | 216 | | 216 | | 212 | | 212 | |
Total sq. ft. | | 23,486 | | 23,486 | | 23,175 | | 23,175 | |
Percent leased (3) | | 92.7 | % | 91.4 | % | 92.6 | % | 91.3 | % |
Rental income (4) | | $ | 127,912 | | $ | 121,896 | | $ | 367,719 | | $ | 358,473 | |
Net operating income (NOI) (5) | | $ | 77,132 | | $ | 73,731 | | $ | 222,712 | | $ | 218,214 | |
NOI % growth | | 4.6 | % | | | 2.1 | % | | |
| | | | | | | | | |
Industrial: | | | | | | | | | |
Properties | | 24 | | 24 | | 23 | | 23 | |
Total sq. ft. | | 12,779 | | 12,779 | | 12,357 | | 12,357 | |
Percent leased (3) | | 99.0 | % | 99.3 | % | 99.0 | % | 99.3 | % |
Rental income (4) | | $ | 19,348 | | $ | 19,047 | | $ | 55,414 | | $ | 53,836 | |
Net operating income (NOI) (5) | | $ | 13,987 | | $ | 13,683 | | $ | 39,697 | | $ | 39,503 | |
NOI % growth | | 2.2 | % | | | 0.5 | % | | |
| | | | | | | | | |
CBD: | | | | | | | | | |
Properties | | 49 | | 49 | | 48 | | 48 | |
Total sq. ft. | | 10,549 | | 10,549 | | 10,425 | | 10,425 | |
Percent leased (3) | | 93.1 | % | 94.8 | % | 93.1 | % | 94.8 | % |
Rental income (4) | | $ | 68,485 | | $ | 67,746 | | $ | 197,346 | | $ | 197,934 | |
Net operating income (NOI) (5) | | $ | 39,069 | | $ | 39,962 | | $ | 113,163 | | $ | 116,335 | |
NOI % growth | | -2.2 | % | | | -2.7 | % | | |
| | | | | | | | | |
Suburban: | | | | | | | | | |
Properties | | 191 | | 191 | | 187 | | 187 | |
Total sq. ft. | | 25,716 | | 25,716 | | 25,107 | | 25,107 | |
Percent leased (3) | | 95.6 | % | 93.9 | % | 95.5 | % | 93.8 | % |
Rental income (4) | | $ | 78,775 | | $ | 73,197 | | $ | 225,787 | | $ | 214,375 | |
Net operating income (NOI) (5) | | $ | 52,050 | | $ | 47,452 | | $ | 149,246 | | $ | 141,382 | |
NOI % growth | | 9.7 | % | | | 5.6 | % | | |
| | | | | | | | | |
Total: | | | | | | | | | |
Properties | | 240 | | 240 | | 235 | | 235 | |
Total sq. ft. | | 36,265 | | 36,265 | | 35,532 | | 35,532 | |
Percent leased (3) | | 94.9 | % | 94.2 | % | 94.8 | % | 94.1 | % |
Rental income (4) | | $ | 147,260 | | $ | 140,943 | | $ | 423,133 | | $ | 412,309 | |
Net operating income (NOI) (5) | | $ | 91,119 | | $ | 87,414 | | $ | 262,409 | | $ | 257,717 | |
NOI % growth | | 4.2 | % | | | 1.8 | % | | |
(1) Based on properties owned continuously since 7/1/2004.
(2) Based on properties owned continuously since 1/1/2004.
(3) Percent leased includes (i) space being fitted out for occupancy pursuant to signed leases and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants.
(4) Includes some triple net lease rental income.
(5) Net operating income, or NOI, is defined as property rental income less property operating expenses.
17
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
SAME PROPERTY RESULTS AND ANALYSIS BY MAJOR MARKET
(dollars and sq. ft. in thousands)
| | As of and For the Three Months Ended (1) | | As of and For the Nine Months Ended (2) | |
| | 9/30/2005 | | 9/30/2004 | | 9/30/2005 | | 9/30/2004 | |
Metro Philadelphia, PA: | | | | | | | | | |
Properties | | 21 | | 21 | | 21 | | 21 | |
Total sq. ft. | | 5,454 | | 5,454 | | 5,454 | | 5,454 | |
Percent leased (3) | | 93.0 | % | 95.5 | % | 93.0 | % | 95.5 | % |
Rental income (4) | | $ | 33,761 | | $ | 34,442 | | $ | 100,490 | | $ | 100,675 | |
Net operating income (NOI) (5) | | $ | 18,641 | | $ | 19,904 | | $ | 55,509 | | $ | 56,528 | |
NOI % growth | | -6.3 | % | | | -1.8 | % | | |
| | | | | | | | | |
Metro Washington, D.C.: | | | | | | | | | |
Properties | | 16 | | 16 | | 16 | | 16 | |
Total sq. ft. | | 2,215 | | 2,215 | | 2,215 | | 2,215 | |
Percent leased (3) | | 95.1 | % | 92.0 | % | 95.1 | % | 92.0 | % |
Rental income (4) | | $ | 16,702 | | $ | 15,192 | | $ | 48,445 | | $ | 45,163 | |
Net operating income (NOI) (5) | | $ | 10,463 | | $ | 9,559 | | $ | 30,683 | | $ | 28,925 | |
NOI % growth | | 9.5 | % | | | 6.1 | % | | |
| | | | | | | | | |
Oahu, HI: | | | | | | | | | |
Properties | | 11 | | 11 | | 11 | | 11 | |
Total sq. ft. | | 9,625 | | 9,625 | | 9,625 | | 9,625 | |
Percent leased (3) | | 99.3 | % | 98.8 | % | 99.3 | % | 98.8 | % |
Rental income (4) | | $ | 11,584 | | $ | 10,830 | | $ | 33,165 | | $ | 31,457 | |
Net operating income (NOI) (5) | | $ | 9,155 | | $ | 8,761 | | $ | 26,456 | | $ | 25,870 | |
NOI % growth | | 4.5 | % | | | 2.3 | % | | |
| | | | | | | | | |
Metro Boston, MA: | | | | | | | | | |
Properties | | 34 | | 34 | | 33 | | 33 | |
Total sq. ft. | | 2,382 | | 2,382 | | 2,336 | | 2,336 | |
Percent leased (3) | | 96.4 | % | 93.3 | % | 96.5 | % | 93.4 | % |
Rental income (4) | | $ | 12,924 | | $ | 12,278 | | $ | 36,133 | | $ | 36,265 | |
Net operating income (NOI) (5) | | $ | 8,707 | | $ | 8,725 | | $ | 25,022 | | $ | 26,614 | |
NOI % growth | | -0.2 | % | | | -6.0 | % | | |
| | | | | | | | | |
Southern California: | | | | | | | | | |
Properties | | 18 | | 18 | | 18 | | 18 | |
Total sq. ft. | | 1,265 | | 1,265 | | 1,265 | | 1,265 | |
Percent leased (3) | | 98.9 | % | 94.2 | % | 98.9 | % | 94.2 | % |
Rental income (4) | | $ | 11,690 | | $ | 10,020 | | $ | 33,164 | | $ | 30,070 | |
Net operating income (NOI) (5) | | $ | 8,198 | | $ | 6,417 | | $ | 22,648 | | $ | 19,383 | |
NOI % growth | | 27.8 | % | | | 16.8 | % | | |
| | | | | | | | | |
Metro Atlanta, GA: | | | | | | | | | |
Properties | | — | | — | | — | | — | |
Total sq. ft. | | — | | — | | — | | — | |
Percent leased (3) | | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % |
Rental income (4) | | $ | — | | $ | — | | $ | — | | $ | — | |
Net operating income (NOI) (5) | | $ | — | | $ | — | | $ | — | | $ | — | |
NOI % growth | | 0.0 | % | | | 0.0 | % | | |
| | | | | | | | | |
Metro Austin, TX: | | | | | | | | | |
Properties | | 26 | | 26 | | 26 | | 26 | |
Total sq. ft. | | 2,806 | | 2,806 | | 2,806 | | 2,806 | |
Percent leased (3) | | 88.6 | % | 79.0 | % | 88.6 | % | 79.0 | % |
Rental income (4) | | $ | 9,637 | | $ | 9,929 | | $ | 29,109 | | $ | 29,285 | |
Net operating income (NOI) (5) | | $ | 4,352 | | $ | 4,535 | | $ | 13,655 | | $ | 13,603 | |
NOI % growth | | -4.0 | % | | | 0.4 | % | | |
| | | | | | | | | |
Other Markets: | | | | | | | | | |
Properties | | 114 | | 114 | | 110 | | 110 | |
Total sq. ft. | | 12,518 | | 12,518 | | 11,831 | | 11,831 | |
Percent leased (3) | | 93.1 | % | 92.8 | % | 92.7 | % | 92.5 | % |
Rental income (4) | | $ | 50,962 | | $ | 48,252 | | $ | 142,627 | | $ | 139,394 | |
Net operating income (NOI) (5) | | $ | 31,603 | | $ | 29,513 | | $ | 88,436 | | $ | 86,794 | |
NOI % growth | | 7.1 | % | | | 1.9 | % | | |
| | | | | | | | | |
Total: | | | | | | | | | |
Properties | | 240 | | 240 | | 235 | | 235 | |
Total sq. ft. | | 36,265 | | 36,265 | | 35,532 | | 35,532 | |
Percent leased (3) | | 94.9 | % | 94.2 | % | 94.8 | % | 94.1 | % |
Rental income (4) | | $ | 147,260 | | $ | 140,943 | | $ | 423,133 | | $ | 412,309 | |
Net operating income (NOI) (5) | | $ | 91,119 | | $ | 87,414 | | $ | 262,409 | | $ | 257,717 | |
NOI % growth | | 4.2 | % | | | 1.8 | % | | |
(1) Based on properties owned continuously since 7/1/2004.
(2) Based on properties owned continuously since 1/1/2004.
(3) Percent leased includes (i) space being fitted out for occupancy pursuant to signed leases and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants.
(4) Includes some triple net lease rental income.
(5) Net operating income, or NOI, is defined as property rental income less property operating expenses.
Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes properties located in Wilmington, DE. Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar. Oahu, HI includes all properties located on the island of Oahu.
18
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
SUMMARY OF EQUITY INVESTMENTS IN FORMER SUBSIDIARIES
(dollars in thousands)
| | 9/30/2005 | | 6/30/2005 | | 3/31/2005 | | 12/31/2004 | | 9/30/2004 | |
Common shares owned by HRP: | | | | | | | | | | | |
Hospitality Properties Trust | | 4,000,000 | | 4,000,000 | | 4,000,000 | | 4,000,000 | | 4,000,000 | |
Senior Housing Properties Trust (1) | | 8,660,738 | | 8,660,738 | | 8,660,738 | | 8,660,738 | | 9,660,738 | |
| | | | | | | | | | | |
Percent owned by HRP: | | | | | | | | | | | |
Hospitality Properties Trust | | 5.6 | % | 5.6 | % | 6.0 | % | 6.0 | % | 6.0 | % |
Senior Housing Properties Trust (1) | | 12.6 | % | 12.6 | % | 12.6 | % | 12.6 | % | 15.2 | % |
| | | | | | | | | | | |
Percent of HRP’s total assets (book value): | | | | | | | | | | | |
Hospitality Properties Trust | | 1.9 | % | 2.0 | % | 2.0 | % | 2.0 | % | 2.1 | % |
Senior Housing Properties Trust (1) | | 2.1 | % | 2.1 | % | 2.3 | % | 2.3 | % | 2.5 | % |
Total | | 4.0 | % | 4.1 | % | 4.3 | % | 4.3 | % | 4.6 | % |
| | | | | | | | | | | |
Carrying book value on HRP’s balance sheet: | | | | | | | | | | | |
Hospitality Properties Trust | | $ | 99,719 | | $ | 100,875 | | $ | 97,829 | | $ | 99,136 | | $ | 100,002 | |
Senior Housing Properties Trust (1) | | 105,779 | | 106,780 | | 107,718 | | 108,668 | | 118,172 | |
Total | | $ | 205,498 | | $ | 207,655 | | $ | 205,547 | | $ | 207,804 | | $ | 218,174 | |
| | | | | | | | | | | |
Market value of shares owned by HRP: | | | | | | | | | | | |
Hospitality Properties Trust | | $ | 171,440 | | $ | 176,280 | | $ | 161,520 | | $ | 184,000 | | $ | 169,960 | |
Senior Housing Properties Trust (1) | | 164,554 | | 163,775 | | 144,461 | | 164,034 | | 172,154 | |
Total | | $ | 335,994 | | $ | 340,055 | | $ | 305,981 | | $ | 348,034 | | $ | 342,114 | |
| | | | | | | | | | | |
| | For the Three Months Ended | | For the Six Months Ended | | | |
| | 9/30/2005 | | 9/30/2004 | | 9/30/2005 | | 9/30/2004 | | | |
Equity in earnings of equity investments: | | | | | | | | | | | |
Hospitality Properties Trust | | $ | 1,724 | | $ | 1,698 | | $ | 4,515 | | $ | 4,860 | | | |
Senior Housing Properties Trust (1) | | 1,770 | | 1,906 | | 5,425 | | 6,275 | | | |
| | $ | 3,494 | | $ | 3,604 | | $ | 9,940 | | $ | 11,135 | | | |
| | | | | | | | | | | |
EBITDA from equity investments: | | | | | | | | | | | |
Hospitality Properties Trust | | $ | 5,983 | | $ | 3,862 | | $ | 14,383 | | $ | 11,477 | | | |
Senior Housing Properties Trust (1) | | 4,744 | | 5,101 | | 14,012 | | 16,245 | | | |
| | $ | 10,727 | | $ | 8,963 | | $ | 28,395 | | $ | 27,722 | | | |
| | | | | | | | | | | |
FFO from equity investments: | | | | | | | | | | | |
Hospitality Properties Trust | | $ | 3,797 | | $ | 3,580 | | $ | 11,366 | | $ | 10,640 | | | |
Senior Housing Properties Trust (1) | | 3,243 | | 3,502 | | 9,710 | | 11,067 | | | |
| | $ | 7,040 | | $ | 7,082 | | $ | 21,076 | | $ | 21,707 | | | |
| | | | | | | | | | | |
Cash distributions from equity investments: | | | | | | | | | | | |
Hospitality Properties Trust | | $ | 2,880 | | $ | 2,880 | | $ | 8,640 | | $ | 8,640 | | | |
Senior Housing Properties Trust (1) | | 2,771 | | 2,995 | | 8,314 | | 9,961 | | | |
| | $ | 5,651 | | $ | 5,875 | | $ | 16,954 | | $ | 18,601 | | | |
(1) In 2004, we sold 4,148,500 shares of Senior Housing Properties Trust in underwritten public offerings for $77,163 ($73,275 net of commissions and other expenses) and we recognized gains of $21,550.
19
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
DEBT SUMMARY
(dollars in thousands)
| | Coupon | | Interest | | Principal | | Maturity | | Due at | | Years to | |
| | Rate | | Rate (1) | | Balance | | Date | | Maturity | | Maturity | |
| | | | | | | | | | | | | |
Secured Debt: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Secured debt | 23 properties in Atlanta, GA (2) | | 8.500 | % | 5.070 | % | $ | 29,491 | | 4/11/2028 | | $ | 4,937 | | 22.5 | |
Secured debt | Six properties in Minneapolis, MN | | 7.020 | % | 7.020 | % | 16,391 | | 2/1/2008 | | 15,724 | | 2.3 | |
Secured debt | Two properties in Richland, WA | | 8.000 | % | 8.000 | % | 5,844 | | 11/15/2008 | | 1,004 | | 3.1 | |
Secured debt | One property in Buffalo, NY | | 5.170 | % | 5.170 | % | 4,944 | | 1/1/2009 | | 134 | | 3.3 | |
Secured debt | One property in Philadelphia, PA (3) | | 6.794 | % | 7.383 | % | 42,893 | | 1/1/2029 | | 2,478 | | 23.3 | |
Secured debt | See note (4) | | 6.814 | % | 7.842 | % | 246,811 | | 1/31/2011 | | 225,547 | | 5.3 | |
Secured debt | Two properties in Rochester, NY | | 6.000 | % | 6.000 | % | 5,497 | | 10/11/2012 | | 4,507 | | 7.0 | |
Total / weighted average secured debt | | 6.946 | % | 7.452 | % | $ | 351,871 | | | | $ | 254,331 | | 8.8 | |
| | | | | | | | | | | | | |
Unsecured Debt: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Unsecured Floating Rate Debt: | | | | | | | | | | | | | |
Revolving credit facility (LIBOR + 65 bps) | | 3.750 | % | 3.750 | % | $ | 346,000 | | 4/28/2009 | | $ | 346,000 | | 3.6 | |
Term loan (LIBOR + 80 bps) (5) | | 3.830 | % | 3.830 | % | 350,000 | | 8/24/2009 | | 350,000 | | 3.9 | |
Total / weighted average unsecured floating rate debt | | 3.790 | % | 3.790 | % | $ | 696,000 | | | | $ | 696,000 | | 3.7 | |
| | | | | | | | | | | | | |
Unsecured Fixed Rate Debt: | | | | | | | | | | | | | |
Senior notes due 2010 | | 8.875 | % | 9.000 | % | $ | 30,000 | | 8/1/2010 | | $ | 30,000 | | 4.8 | |
Senior notes due 2010 | | 8.625 | % | 8.770 | % | 20,000 | | 10/1/2010 | | 20,000 | | 5.0 | |
Senior notes due 2012 | | 6.950 | % | 7.179 | % | 200,000 | | 4/1/2012 | | 200,000 | | 6.5 | |
Senior notes due 2013 | | 6.500 | % | 6.693 | % | 200,000 | | 1/15/2013 | | 200,000 | | 7.3 | |
Senior notes due 2014 | | 5.750 | % | 5.828 | % | 250,000 | | 2/15/2014 | | 250,000 | | 8.4 | |
Senior notes due 2015 | | 6.400 | % | 6.601 | % | 200,000 | | 2/15/2015 | | 200,000 | | 9.4 | |
Senior notes due 2016 | | 6.250 | % | 6.470 | % | 400,000 | | 8/15/2016 | | 400,000 | | 10.9 | |
Total / weighted average unsecured fixed rate debt | | 6.420 | % | 6.604 | % | $ | 1,300,000 | | | | $ | 1,300,000 | | 8.7 | |
| | | | | | | | | | | | | |
Total / weighted average unsecured debt | | 5.503 | % | 5.623 | % | $ | 1,996,000 | | | | $ | 1,996,000 | | 7.0 | |
| | | | | | | | | | | | | |
Total / weighted average secured debt | | 6.946 | % | 7.452 | % | $ | 351,871 | | | | $ | 254,331 | | 8.8 | |
Total / weighted average unsecured floating rate debt | | 3.790 | % | 3.790 | % | 696,000 | | | | 696,000 | | 3.7 | |
Total / weighted average unsecured fixed rate debt | | 6.420 | % | 6.604 | % | 1,300,000 | | | | 1,300,000 | | 8.7 | |
Total / weighted average debt | | 5.719 | % | 5.897 | % | $ | 2,347,871 | | | | $ | 2,250,331 | | 7.3 | |
(1) Includes the effect of interest rate protection, mark-to-market accounting for certain assumed mortgages, and discounts on certain mortgages and unsecured notes. Excludes effects of offering and transaction costs.
(2) The loan becomes prepayable on 1/11/2008. On 4/11/2008, the interest rate increases to at least 13.5% and the loan becomes subject to accelerated amortization. We currently intend to prepay this loan in 2008.
(3) The loan becomes prepayable on 1/31/2011. On 1/31/2011, the interest rate increases to 8.794% and the loan becomes subject to accelerated amortization. We currently intend to prepay this loan in 2011.
(4) Eight properties in Austin, TX, one property in Philadelphia, PA, two properties in Los Angeles, CA and two properties in Washington, DC.
(5) The term loan becomes prepayable on February 26, 2006.
20
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
DEBT MATURITY SCHEDULE
(dollars in thousands)
| | Scheduled Principal Payments During Period | | | |
| | | | Unsecured | | Unsecured | | | | Weighted | |
| | Secured | | Floating | | Fixed | | | | Average | |
Year | | Debt | | Rate Debt | | Rate Debt | | Total | | Interest Rate | |
2005 | | $ | 2,268 | | $ | — | | $ | — | | $ | 2,268 | | 7.0 | % |
2006 | | 7,979 | | — | | — | | 7,979 | | 6.8 | % |
2007 | | 8,543 | | — | | — | | 8,543 | | 6.8 | % |
2008 | | 24,587 | | — | | — | | 24,587 | | 7.0 | % |
2009 | | 5,968 | | 696,000 | | — | | 701,968 | | 3.8 | % |
2010 | | 6,257 | | — | | 50,000 | | 56,257 | | 8.6 | % |
2011 | | 227,714 | | — | | — | | 227,714 | | 6.8 | % |
2012 | | 6,382 | | — | | 200,000 | | 206,382 | | 6.9 | % |
2013 | | 1,898 | | — | | 200,000 | | 201,898 | | 6.5 | % |
2014 | | 2,046 | | — | | 250,000 | | 252,046 | | 5.8 | % |
2015 and thereafter | | 58,229 | | — | | 600,000 | | 658,229 | | 6.4 | % |
Total | | $ | 351,871 | | $ | 696,000 | | $ | 1,300,000 | | $ | 2,347,871 | | 5.7 | % |
| | | | | | | | | | | |
Percent | | 15.0 | % | 29.6 | % | 55.4 | % | 100.0 | % | | |
21
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS
| | As of and For the Three Months Ended | |
| | 9/30/2005 | | 6/30/2005 | | 3/31/2005 | | 12/31/2004 | | 9/30/2004 | |
Leverage Ratios: | | | | | | | | | | | |
| | | | | | | | | | | |
Total debt / total assets | | 45.3 | % | 46.1 | % | 44.7 | % | 48.9 | % | 47.8 | % |
Total debt / gross book value of real estate assets (1) | | 44.8 | % | 45.7 | % | 44.7 | % | 48.9 | % | 48.3 | % |
Total debt / gross book value of real estate assets plus equity investments in former subsidiaries (1) | | 43.1 | % | 43.9 | % | 42.8 | % | 46.9 | % | 46.1 | % |
Total debt / total market capitalization | | 42.7 | % | 43.4 | % | 42.6 | % | 45.5 | % | 47.7 | % |
Total debt / total book capitalization | | 46.8 | % | 47.6 | % | 45.8 | % | 50.5 | % | 49.5 | % |
Secured debt / total assets | | 6.7 | % | 8.7 | % | 9.1 | % | 9.1 | % | 9.2 | % |
Variable rate debt / total debt | | 29.8 | % | 25.4 | % | 19.9 | % | 22.3 | % | 19.6 | % |
Variable rate debt / total assets | | 13.5 | % | 11.7 | % | 8.9 | % | 10.9 | % | 9.4 | % |
| | | | | | | | | | | |
Coverage Ratios: | | | | | | | | | | | |
| | | | | | | | | | | |
EBITDA / interest expense | | 3.3 | x | 3.2 | x | 3.0 | x | 3.0 | x | 3.3 | x |
EBITDA / interest expense + preferred distributions | | 2.5 | x | 2.4 | x | 2.2 | x | 2.2 | x | 2.4 | x |
| | | | | | | | | | | |
Public Debt Covenants (2): | | | | | | | | | | | |
| | | | | | | | | | | |
Debt / adjusted total assets (maximum 60%) | | 42.2 | % | 43.1 | % | 41.9 | % | 46.0 | % | 45.1 | % |
Secured debt / adjusted total assets (maximum 40%) | | 6.3 | % | 8.1 | % | 8.5 | % | 8.6 | % | 8.7 | % |
Consolidated income available for debt service / debt service (minimum 1.5x) | | 3.2 | x | 3.1 | x | 3.2 | x | 3.0 | x | 3.1 | x |
Total unencumbered assets / unsecured debt (minimum 200%) | | 239.0 | % | 233.0 | % | 242.2 | % | 216.1 | % | 221.3 | % |
(1) Gross book value of real estate assets is real estate properties, at cost, including purchase price allocations relating to FAS 141.
(2) Adjusted total assets and unencumbered assets includes original cost of real estate assets and excludes depreciation and amortization, accounts receivable and other intangible assets. Consolidated income available for debt service is earnings from operations excluding interest expense, depreciation and amortization, taxes, and gains and losses on sales of assets, determined together with debt service on a pro forma basis for the four consecutive fiscal quarters most recently ended.
22
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
TENANT IMPROVEMENTS, LEASING COSTS AND CAPITAL IMPROVEMENTS
(dollars and sq. ft. in thousands, except per sq. ft. data)
| | For the Three Months Ended | |
| | 9/30/2005 | | 6/30/2005 | | 3/31/2005 | | 12/31/2004 | | 9/30/2004 | |
Tenant improvements (TI) | | $ | 27,829 | | $ | 21,315 | | $ | 11,657 | | $ | 14,221 | | $ | 8,027 | |
Leasing costs (LC) | | 4,617 | | 7,588 | | 3,090 | | 10,121 | | 4,264 | |
Total TI and LC | | 32,446 | | 28,903 | | 14,747 | | 24,342 | | 12,291 | |
| | | | | | | | | | | |
Recurring building improvements (1) | | 7,044 | | 1,821 | | 4,984 | | 8,470 | | 5,869 | |
Development, redevelopment and other activities (2) | | 4,674 | | 5,396 | | 536 | | 1,684 | | 1,722 | |
Total capital improvements, including TI and LC | | $ | 44,164 | | $ | 36,120 | | $ | 20,267 | | $ | 34,496 | | $ | 19,882 | |
| | | | | | | | | | | |
Sq. ft. beginning of period | | 52,792 | | 44,151 | | 44,154 | | 43,333 | | 36,652 | |
Sq. ft. end of period | | 54,132 | | 52,792 | | 44,151 | | 44,154 | | 43,333 | |
Average sq. ft. during period | | 53,462 | | 48,472 | | 44,153 | | 43,744 | | 39,993 | |
| | | | | | | | | | | |
Recurring building improvements per average sq. ft. during period | | $ | 0.13 | | $ | 0.04 | | $ | 0.11 | | $ | 0.19 | | $ | 0.15 | |
(1) Building improvements include improvements that enhance the value of our properties and that are generally recurring.
(2) Development, redevelopment and other activities include significant costs that are unusual or infrequent.
23
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
ACQUISITIONS AND DISPOSITIONS INFORMATION
(dollars and sq. ft. in thousands, except per sq. ft. amounts)
Acquisitions:
| | | | | | | | | | | | | | | | Weighted | | | | |
| | | | | | | | | | | | | | | | Average | | | | |
| | | | | | | | | | | | Purchase | | | | Remaining | | | | |
Date | | | | Office/ | | Number of | | | | Purchase | | Price (1) / | | Cap | | Lease | | Percent | | |
Acquired | | Location | | Industrial | | Properties | | Sq. Ft. | | Price (1) | | Sq. Ft. | | Rate (2) | | Term (3) | | Leased (4) | | Major Tenant |
| | | | | | | | | | | | | | | | | | | | |
| | There were no acquisitions during the three months ended March 31, 2005 | | |
| | | | | | | | | | | | | | | | | | | | |
| | Q1 2005 Total / Weighted Average | | — | | — | | — | | — | | — | | — | | — | | |
| | | | | | | | | | | | | | | | | | | | |
May-05 | | Indianapolis, IN | | Office | | 1 | | 628 | | $ | 74,750 | | $ | 119.03 | | 10.9 | % | 3.8 | | 95.9 | % | National City Bank, Indiana |
Jun-05 | | Oahu, HI | | Industrial Lands | | 41 | | 8,180 | | 115,500 | | 14.12 | | 7.6 | % | 15.0 | | 95.4 | % | Tesoro Hawaii Corporation |
Jun-05 | | Indianapolis, IN | | Office | | 1 | | 72 | | 6,600 | | 91.67 | | 9.4 | % | 5.9 | | 100.0 | % | Indiana Lumbermens Mutual Insurance Company |
| | | | | | | | | | | | | | | | | | | | |
| | Q2 2005 Total / Weighted Average | | 43 | | 8,880 | | 196,850 | | 22.17 | | 8.9 | % | 8.0 | | 95.4 | % | |
| | | | | | | | | | | | | | | | | | | | |
Jul-05 | | Milford, CT | | Office | | 1 | | 144 | | 17,000 | | 118.06 | | 9.1 | % | 2.9 | | 90.9 | % | Hubbell Incorporated |
Aug-05 | | Roswell, GA | | Office | | 8 | | 244 | | 25,100 | | 102.87 | | 9.4 | % | 3.0 | | 87.3 | % | Kimberly-Clark Corporation |
Sep-05 | | Atlanta, GA | | Office | | 1 | | 96 | | 6,150 | | 64.06 | | — | | 2.4 | | 30.1 | % | The March of Dimes |
Sep-05 | | Pittsburgh, PA | | Office | | 9 | | 848 | | 69,100 | | 81.49 | | 9.2 | % | 3.6 | | 77.7 | % | Aetna Life Insurance Company |
| | | | | | | | | | | | | | | | | | | | |
| | Q3 2005 Total / Weighted Average | | 19 | | 1,332 | | 117,350 | | 88.10 | | 8.8 | % | 3.4 | | 77.5 | % | |
| | | | | | | | | | | | | | | | | | | | |
| | Total / weighted average | | 62 | | 10,212 | | $ | 314,200 | | $ | 30.77 | | 8.8 | % | 5.9 | | 93.1 | % | |
Dispositions:
| | | | | | | | | | | | | | | | | | Sale Price | | | | |
| | | | | | | | | | | | | | | | Original | | Multiple | | | | |
| | | | | | | | | | | | Original | | Sale | | Purchase | | of Original | | Book | | |
Date | | | | Office/ | | Number of | | | | Sale | | Purchase | | Price (1) / | | Price (1) / | | Purchase | | Gain | | |
Sold | | Location | | Industrial | | Properties | | Sq. Ft. | | Price (1) | | Price (1) | | Sq. Ft. | | Sq. Ft. | | Price | | on Sale | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | There were no dispositions during the three months ended March 31, 2005 | | | | |
| | Q1 2005 Total | | | | — | | — | | — | | — | | — | | — | | — | | — | | |
| | | | | | | | | | | | | | | | | | | | | | |
May-05 | | Westwood, MA | | Industrial | | 3 | | 237 | | $ | 20,500 | | $ | 13,410 | | $ | 86.50 | | $ | 56.58 | | 1.5 | x | $ | 7,592 | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | Q2 2005 Total | | | | 3 | | 237 | | 20,500 | | 13,410 | | 86.50 | | 56.58 | | 1.5 | x | 7,592 | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | There were no dispositions during the three months ended September 30, 2005 | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | Q3 2005 Total | | | | — | | — | | — | | — | | — | | — | | — | | — | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | Total | | | | 3 | | 237 | | $ | 20,500 | | $ | 13,410 | | $ | 86.50 | | $ | 56.58 | | 1.5 | x | $ | 7,592 | | |
(1) Represents the gross contract purchase or sale price and excludes closing costs and purchase price allocations relating to FAS 141.
(2) Represents estimated current GAAP based annual net operating income, or NOI, which is defined as property rental income less property operating expenses, divided by the Purchase Price.
(3) Average remaining lease term based on rental income as of the date acquired.
(4) Percent leased as of the date acquired.
24
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
FINANCING ACTIVITIES
(share amounts and dollars in thousands)
| | For the Three Months Ended | |
| | 9/30/2005 | | 6/30/2005 | | 3/31/2005 | |
| | | | | | | |
Debt Transactions (1): | | | | | | | |
New debt raised | | $ | — | | $ | — | | $ | — | |
New debt assumed as part of acquisitions | | — | | — | | — | |
Total new debt | | — | | — | | — | |
| | | | | | | |
Debt retired | | (84,913 | ) | — | | (100,000 | ) |
Net debt | | $ | (84,913 | ) | $ | — | | $ | (100,000 | ) |
| | | | | | | |
Equity Transactions: | | | | | | | |
New common shares issued | | 10,000 | | — | | 22,500 | |
New common equity raised, net | | $ | 124,957 | | $ | — | | $ | 259,017 | |
| | | | | | | |
New preferred shares issued | | — | | — | | — | |
New preferred equity raised, net | | — | | — | | — | |
Total new equity | | $ | 124,957 | | $ | — | | $ | 259,017 | |
| | | | | | | |
Preferred equity retired | | — | | — | | — | |
Net equity | | $ | 124,957 | | $ | — | | $ | 259,017 | |
(1) Excludes drawings and repayments on our revolving credit facility. During the three months ended March 31, 2005, we amended our revolving credit facility to change its maturity to 2009 (plus a one year extension option), to increase the amount available to be drawn to $750,000 (which may be further increased to $1,500,000 in certain circumstances) and to lower the interest on drawn amounts to LIBOR plus 65 b.p.
25
PORTFOLIO AND LEASING INFORMATION
26
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
PORTFOLIO SUMMARY BY PROPERTY TYPE, TENANT AND MAJOR MARKET (SQUARE FEET)
(sq. ft. in thousands)
| | Metro
Philadelphia, PA | | Metro
Washington, DC | | Oahu, HI | | Metro
Boston, MA | | Southern
California | | Metro
Atlanta, GA | | Metro
Austin, TX | | Other
Markets | | Total | |
Square Feet: | | | | | | | | | | | | | | | | | | | |
Office | | 5,454 | | 2,645 | | — | | 2,738 | | 1,444 | | 2,186 | | 1,490 | | 14,407 | | 30,364 | |
Industrial | | — | | — | | 17,879 | | — | | — | | — | | 1,316 | | 4,573 | | 23,768 | |
Total | | 5,454 | | 2,645 | | 17,879 | | 2,738 | | 1,444 | | 2,186 | | 2,806 | | 18,980 | | 54,132 | |
| | | | | | | | | | | | | | | | | | | |
CBD | | 4,601 | | 892 | | 158 | | 523 | | 331 | | — | | 185 | | 4,833 | | 11,523 | |
Suburban | | 853 | | 1,753 | | 17,721 | | 2,215 | | 1,113 | | 2,186 | | 2,621 | | 14,147 | | 42,609 | |
Total | | 5,454 | | 2,645 | | 17,879 | | 2,738 | | 1,444 | | 2,186 | | 2,806 | | 18,980 | | 54,132 | |
| | | | | | | | | | | | | | | | | | | |
U.S. Government and other government tenants (1) | | 11 | | 1,372 | | — | | 211 | | 509 | | 787 | | 15 | | 2,673 | | 5,578 | |
Medical related tenants (1) | | 997 | | 347 | | — | | 935 | | 630 | | 158 | | 358 | | 2,101 | | 5,526 | |
Land leases (1) | | — | | — | | 17,435 | | — | | — | | — | | — | | — | | 17,435 | |
Other investment grade tenants (1)(2) | | 1,838 | | 120 | | — | | 954 | | 39 | | 145 | | 387 | | 4,685 | | 8,168 | |
Other tenants (1) | | 2,224 | | 682 | | 11 | | 551 | | 237 | | 856 | | 1,727 | | 7,847 | | 14,135 | |
Vacant | | 384 | | 124 | | 433 | | 87 | | 29 | | 240 | | 319 | | 1,674 | | 3,290 | |
Total | | 5,454 | | 2,645 | | 17,879 | | 2,738 | | 1,444 | | 2,186 | | 2,806 | | 18,980 | | 54,132 | |
| | | | | | | | | | | | | | | | | | | |
Percent by Major Market: | | | | | | | | | | | | | | | | | | | |
Office | | 18 | % | 9 | % | 0 | % | 9 | % | 5 | % | 7 | % | 5 | % | 47 | % | 100 | % |
Industrial | | 0 | % | 0 | % | 75 | % | 0 | % | 0 | % | 0 | % | 6 | % | 19 | % | 100 | % |
Total | | 10 | % | 5 | % | 33 | % | 5 | % | 3 | % | 4 | % | 5 | % | 35 | % | 100 | % |
| | | | | | | | | | | | | | | | | | | |
CBD | | 40 | % | 8 | % | 1 | % | 4 | % | 3 | % | 0 | % | 2 | % | 42 | % | 100 | % |
Suburban | | 2 | % | 4 | % | 42 | % | 5 | % | 3 | % | 5 | % | 6 | % | 33 | % | 100 | % |
Total | | 10 | % | 5 | % | 33 | % | 5 | % | 3 | % | 4 | % | 5 | % | 35 | % | 100 | % |
| | | | | | | | | | | | | | | | | | | |
U.S. Government and other government tenants | | 0 | % | 25 | % | 0 | % | 4 | % | 9 | % | 14 | % | 0 | % | 48 | % | 100 | % |
Medical related tenants | | 18 | % | 6 | % | 0 | % | 17 | % | 11 | % | 3 | % | 7 | % | 38 | % | 100 | % |
Land leases | | 0 | % | 0 | % | 100 | % | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | 100 | % |
Other investment grade tenants (2) | | 22 | % | 2 | % | 0 | % | 12 | % | 0 | % | 2 | % | 5 | % | 57 | % | 100 | % |
Other tenants | | 16 | % | 5 | % | 0 | % | 4 | % | 2 | % | 6 | % | 12 | % | 55 | % | 100 | % |
Vacant | | 12 | % | 4 | % | 13 | % | 3 | % | 1 | % | 7 | % | 10 | % | 50 | % | 100 | % |
Total | | 10 | % | 5 | % | 33 | % | 5 | % | 3 | % | 4 | % | 5 | % | 35 | % | 100 | % |
| | | | | | | | | | | | | | | | | | | |
Percent by Property Type and Tenant: | | | | | | | | | | | | | | | | | | | |
Office | | 100 | % | 100 | % | 0 | % | 100 | % | 100 | % | 100 | % | 53 | % | 76 | % | 56 | % |
Industrial | | 0 | % | 0 | % | 100 | % | 0 | % | 0 | % | 0 | % | 47 | % | 24 | % | 44 | % |
Total | | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
| | | | | | | | | | | | | | | | | | | |
CBD | | 84 | % | 34 | % | 1 | % | 19 | % | 23 | % | 0 | % | 7 | % | 25 | % | 21 | % |
Suburban | | 16 | % | 66 | % | 99 | % | 81 | % | 77 | % | 100 | % | 93 | % | 75 | % | 79 | % |
Total | | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
| | | | | | | | | | | | | | | | | | | |
U.S. Government and other government tenants | | 0 | % | 51 | % | 0 | % | 8 | % | 35 | % | 36 | % | 1 | % | 14 | % | 11 | % |
Medical related tenants | | 18 | % | 13 | % | 0 | % | 34 | % | 44 | % | 7 | % | 13 | % | 11 | % | 10 | % |
Land leases | | 0 | % | 0 | % | 98 | % | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | 32 | % |
Other investment grade tenants (2) | | 34 | % | 5 | % | 0 | % | 35 | % | 3 | % | 7 | % | 14 | % | 25 | % | 15 | % |
Other tenants | | 41 | % | 26 | % | 0 | % | 20 | % | 17 | % | 39 | % | 61 | % | 41 | % | 26 | % |
Vacant | | 7 | % | 5 | % | 2 | % | 3 | % | 1 | % | 11 | % | 11 | % | 9 | % | 6 | % |
Total | | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
(1) Sq. ft. is pursuant to signed leases as of September 30, 2005, and includes (i) space being fitted out for occupancy and (ii) space which is leased, but is not occupied or is being offered for sublease.
(2) Excludes investment grade tenants included above.
Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes properties located in Wilmington, DE. Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar. Oahu, HI includes all properties located on the island of Oahu.
27
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
PORTFOLIO SUMMARY BY PROPERTY TYPE, TENANT AND MAJOR MARKET (ANNUALIZED RENTAL INCOME)
(dollars in thousands)
| | Metro | | Metro | | | | Metro | | Southern | | Metro | | Metro | | Other | | | |
| | Philadelphia, PA | | Washington, DC | | Oahu, HI | | Boston, MA | | California | | Atlanta, GA | | Austin, TX | | Markets | | Total | |
Annualized Rental Income (1): | | | | | | | | | | | | | | | | | | | |
Office | | $ | 128,136 | | $ | 76,953 | | $ | — | | $ | 58,809 | | $ | 46,823 | | $ | 37,470 | | $ | 25,363 | | $ | 246,266 | | $ | 619,820 | |
Industrial | | — | | — | | 55,646 | | — | | — | | — | | 16,031 | | 39,012 | | 110,689 | |
Total | | $ | 128,136 | | $ | 76,953 | | $ | 55,646 | | $ | 58,809 | | $ | 46,823 | | $ | 37,470 | | $ | 41,394 | | $ | 285,278 | | $ | 730,509 | |
| | | | | | | | | | | | | | | | | | | |
CBD | | $ | 117,032 | | $ | 34,590 | | $ | 1,116 | | $ | 18,262 | | $ | 20,408 | | $ | — | | $ | 4,814 | | $ | 86,061 | | $ | 282,283 | |
Suburban | | 11,104 | | 42,363 | | 54,530 | | 40,547 | | 26,415 | | 37,470 | | 36,580 | | 199,217 | | 448,226 | |
Total | | $ | 128,136 | | $ | 76,953 | | $ | 55,646 | | $ | 58,809 | | $ | 46,823 | | $ | 37,470 | | $ | 41,394 | | $ | 285,278 | | $ | 730,509 | |
| | | | | | | | | | | | | | | | | | | |
U.S. Government and other government tenants | | $ | 220 | | $ | 39,367 | | $ | — | | $ | 4,926 | | $ | 10,360 | | $ | 15,925 | | $ | 226 | | $ | 46,532 | | $ | 117,556 | |
Medical related tenants | | 21,265 | | 12,543 | | — | | 17,772 | | 30,085 | | 3,288 | | 8,907 | | 36,930 | | 130,790 | |
Land leases | | — | | — | | 55,479 | | — | | — | | — | | — | | — | | 55,479 | |
Other investment grade
tenants (2) | | 48,157 | | 4,080 | | — | | 20,176 | | 1,069 | | 2,663 | | 5,966 | | 78,936 | | 161,047 | |
Other tenants | | 58,494 | | 20,963 | | 167 | | 15,935 | | 5,309 | | 15,594 | | 26,295 | | 122,880 | | 265,637 | |
Total | | $ | 128,136 | | $ | 76,953 | | $ | 55,646 | | $ | 58,809 | | $ | 46,823 | | $ | 37,470 | | $ | 41,394 | | $ | 285,278 | | $ | 730,509 | |
| | | | | | | | | | | | | | | | | | | |
Percent by Major Market: | | | | | | | | | | | | | | | | | | | |
Office | | 21 | % | 12 | % | 0 | % | 10 | % | 7 | % | 6 | % | 4 | % | 40 | % | 100 | % |
Industrial | | 0 | % | 0 | % | 50 | % | 0 | % | 0 | % | 0 | % | 15 | % | 35 | % | 100 | % |
Total | | 18 | % | 10 | % | 8 | % | 8 | % | 6 | % | 5 | % | 6 | % | 39 | % | 100 | % |
| | | | | | | | | | | | | | | | | | | |
CBD | | 41 | % | 12 | % | 0 | % | 7 | % | 7 | % | 0 | % | 2 | % | 31 | % | 100 | % |
Suburban | | 3 | % | 10 | % | 12 | % | 9 | % | 6 | % | 8 | % | 8 | % | 44 | % | 100 | % |
Total | | 18 | % | 10 | % | 8 | % | 8 | % | 6 | % | 5 | % | 6 | % | 39 | % | 100 | % |
| | | | | | | | | | | | | | | | | | | |
U.S. Government and other government tenants | | 0 | % | 34 | % | 0 | % | 4 | % | 9 | % | 14 | % | 0 | % | 39 | % | 100 | % |
Medical related tenants | | 16 | % | 10 | % | 0 | % | 14 | % | 23 | % | 2 | % | 7 | % | 28 | % | 100 | % |
Land leases | | 0 | % | 0 | % | 100 | % | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | 100 | % |
Other investment grade
tenants (2) | | 30 | % | 2 | % | 0 | % | 12 | % | 1 | % | 2 | % | 4 | % | 49 | % | 100 | % |
Other tenants | | 22 | % | 8 | % | 0 | % | 6 | % | 2 | % | 6 | % | 10 | % | 46 | % | 100 | % |
Total | | 18 | % | 10 | % | 8 | % | 8 | % | 6 | % | 5 | % | 6 | % | 39 | % | 100 | % |
| | | | | | | | | | | | | | | | | | | |
Percent by Property Type and Tenant: | | | | | | | | | | | | | | | | | | | |
Office | | 100 | % | 100 | % | 0 | % | 100 | % | 100 | % | 100 | % | 61 | % | 86 | % | 85 | % |
Industrial | | 0 | % | 0 | % | 100 | % | 0 | % | 0 | % | 0 | % | 39 | % | 14 | % | 15 | % |
Total | | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
| | | | | | | | | | | | | | | | | | | |
CBD | | 91 | % | 45 | % | 2 | % | 31 | % | 44 | % | 0 | % | 12 | % | 30 | % | 39 | % |
Suburban | | 9 | % | 55 | % | 98 | % | 69 | % | 56 | % | 100 | % | 88 | % | 70 | % | 61 | % |
Total | | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
| | | | | | | | | | | | | | | | | | | |
U.S. Government and other government tenants | | 0 | % | 51 | % | 0 | % | 8 | % | 22 | % | 43 | % | 1 | % | 16 | % | 16 | % |
Medical related tenants | | 17 | % | 16 | % | 0 | % | 30 | % | 64 | % | 9 | % | 22 | % | 13 | % | 18 | % |
Land leases | | 0 | % | 0 | % | 100 | % | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | 8 | % |
Other investment grade
tenants (2) | | 38 | % | 5 | % | 0 | % | 35 | % | 2 | % | 7 | % | 14 | % | 28 | % | 22 | % |
Other tenants | | 45 | % | 28 | % | 0 | % | 27 | % | 12 | % | 41 | % | 63 | % | 43 | % | 36 | % |
Total | | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
(1) Annualized rental income is rents pursuant to signed leases as of September 30, 2005, plus expense reimbursements; includes some triple net lease rents and excludes lease value amortization.
(2) Excludes investment grade tenants included above.
Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes properties located in Wilmington, DE. Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar. Oahu, HI includes all properties located on the island of Oahu.
28
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
SUMMARY OF PROPERTIES BY MAJOR MARKET
(sq. ft. in thousands)
| | As of 9/30/2005 | | Annualized | | % of Annualized | |
Market | | Properties | | Sq. Ft. | | % Sq. Ft. | | Rental Income (1) | | Rental Income (1) | |
Metro Philadelphia, PA | | 21 | | 5,454 | | 10.1 | % | $ | 128,136 | | 17.5 | % |
Metro Washington, DC | | 20 | | 2,645 | | 4.9 | % | 76,953 | | 10.5 | % |
Oahu, HI | | 53 | | 17,879 | | 33.0 | % | 55,646 | | 7.6 | % |
Metro Boston, MA | | 36 | | 2,738 | | 5.1 | % | 58,809 | | 8.1 | % |
Southern California | | 24 | | 1,444 | | 2.7 | % | 46,823 | | 6.4 | % |
Metro Atlanta, GA | | 45 | | 2,186 | | 4.0 | % | 37,470 | | 5.1 | % |
Metro Austin, TX | | 26 | | 2,806 | | 5.2 | % | 41,394 | | 5.7 | % |
Other markets | | 209 | | 18,980 | | 35.0 | % | 285,278 | | 39.1 | % |
Total | | 434 | | 54,132 | | 100.0 | % | $ | 730,509 | | 100.0 | % |
| | Percent NOI For the Three Months Ended (2) | |
| | 9/30/2005 | | 6/30/2005 | | 3/31/2005 | | 12/31/2004 | | 9/30/2004 | |
Metro Philadelphia, PA | | 16.4 | % | 18.7 | % | 15.6 | % | 14.8 | % | 19.9 | % |
Metro Washington, DC | | 11.1 | % | 11.2 | % | 11.9 | % | 11.7 | % | 11.4 | % |
Oahu, HI | | 10.1 | % | 8.3 | % | 8.4 | % | 8.5 | % | 8.7 | % |
Metro Boston, MA | | 8.8 | % | 8.8 | % | 9.2 | % | 10.3 | % | 10.8 | % |
Southern California | | 7.6 | % | 6.9 | % | 7.6 | % | 7.9 | % | 6.7 | % |
Metro Atlanta, GA | | 4.8 | % | 4.9 | % | 5.2 | % | 5.1 | % | 4.2 | % |
Metro Austin, TX | | 3.8 | % | 4.1 | % | 4.6 | % | 4.5 | % | 4.5 | % |
Other markets | | 37.4 | % | 37.1 | % | 37.5 | % | 37.2 | % | 33.8 | % |
Total | | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
(1) Annualized rental income is rents pursuant to signed leases as of September 30, 2005, plus expense reimbursements; includes some triple net lease rents and excludes lease value amortization.
(2) NOI, or net operating income, is defined as property rental income less property operating expenses.
Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes properties located in Wilmington, DE. Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar. Oahu, HI includes all properties located on the island of Oahu.
29
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
LEASING SUMMARY
(dollars and sq. ft. in thousands, except per sq. ft. data)
| | As of and For the Three Months Ended | |
| | 9/30/2005 | | 6/30/2005 | | 3/31/2005 | | 12/31/2004 | | 9/30/2004 | |
Properties | | 434 | | 415 | | 375 | | 375 | | 365 | |
Total sq. ft. (1) | | 54,132 | | 52,792 | | 44,151 | | 44,154 | | 43,333 | |
Percentage leased | | 93.9 | % | 94.1 | % | 93.7 | % | 93.0 | % | 93.1 | % |
| | | | | | | | | | | |
Leasing Activity (sq. ft.): | | | | | | | | | | | |
New leases | | 512 | | 573 | | 677 | | 563 | | 471 | |
Renewals | | 404 | | 726 | | 829 | | 869 | | 1,081 | |
Total | | 916 | | 1,299 | | 1,506 | | 1,432 | | 1,552 | |
| | | | | | | | | | | |
% Change in GAAP Rent (2): | | | | | | | | | | | |
New leases | | -6 | % | 12 | % | -4 | % | 6 | % | -5 | % |
Renewals | | -4 | % | 0 | % | -16 | % | -2 | % | 1 | % |
Weighted average by sq. ft. | | -5 | % | 5 | % | -11 | % | 1 | % | 0 | % |
| | | | | | | | | | | |
Capital Commitments (3): | | | | | | | | | | | |
New leases | | $ | 10,384 | | $ | 12,658 | | $ | 14,867 | | $ | 27,921 | | $ | 15,162 | |
Renewals | | 2,834 | | 2,589 | | 12,377 | | 16,219 | | 20,865 | |
Total | | $ | 13,218 | | $ | 15,247 | | $ | 27,244 | | $ | 44,140 | | $ | 36,027 | |
| | | | | | | | | | | |
Capital Commitments per Sq. Ft. (3): | | | | | | | | | | | |
New leases | | $ | 20.28 | | $ | 22.09 | | $ | 21.96 | | $ | 49.59 | | $ | 32.19 | |
Renewals | | $ | 7.01 | | $ | 3.57 | | $ | 14.93 | | $ | 18.66 | | $ | 19.30 | |
Total | | $ | 14.43 | | $ | 11.74 | | $ | 18.09 | | $ | 30.82 | | $ | 23.21 | |
| | | | | | | | | | | |
Weighted Average Lease Term by Sq. Ft. (years): | | | | | | | | | | | |
New leases | | 6.3 | | 7.4 | | 5.5 | | 9.6 | | 9.1 | |
Renewals | | 5.5 | | 3.1 | | 6.7 | | 8.4 | | 7.9 | |
Total | | 5.9 | | 4.9 | | 6.2 | | 8.9 | | 8.2 | |
| | | | | | | | | | | |
Capital Commitments per Sq. Ft. per Year: | | | | | | | | | | | |
New leases | | $ | 3.22 | | $ | 2.99 | | $ | 3.99 | | $ | 5.17 | | $ | 3.54 | |
Renewals | | $ | 1.28 | | $ | 1.15 | | $ | 2.23 | | $ | 2.22 | | $ | 2.44 | |
Total | | $ | 2.45 | | $ | 2.40 | | $ | 2.92 | | $ | 3.46 | | $ | 2.83 | |
(1) Sq. ft. measurements are subject to modest changes when space is re-measured or re-configured for new tenants.
(2) Percent difference in prior rents charged for same space. Rents include expense reimbursements and exclude lease value amortization.
(3) Represents commitments to tenant improvements (TI) and leasing commissions and costs (LC).
The above leasing summary is based on leases executed during the periods indicated.
30
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
OCCUPANCY AND LEASING ANALYSIS BY PROPERTY TYPE AND MAJOR MARKET
(dollars and sq. ft. in thousands)
| | | | Sq. Ft. Leases Executed During
Three Months Ended 9/30/05 | | Sq. Ft. Leased | |
| | Total Sq. Ft.
As of | | | | | | | | As of | | | | New and | | Acquisitions / | | As of | |
Property Type/Market | | 9/30/2005 | | New | | Renewals | | Total | | 6/30/2005 | | Expired | | Renewals | | (Sales) | | 9/30/2005 | |
Office | | 30,364 | | 388 | | 328 | | 716 | | 26,771 | | (650 | ) | 716 | | 1,079 | | 27,916 | |
Industrial | | 23,768 | | 124 | | 76 | | 200 | | 22,886 | | (160 | ) | 200 | | — | | 22,926 | |
Total | | 54,132 | | 512 | | 404 | | 916 | | 49,657 | | (810 | ) | 916 | | 1,079 | | 50,842 | |
Percent leased | | | | | | | | | | 94.1 | % (1) | | | | | | | 93.9 | % |
| | | | | | | | | | | | | | | | | | | |
CBD | | 11,523 | | 51 | | 134 | | 185 | | 10,826 | | (324 | ) | 185 | | — | | 10,687 | |
Suburban | | 42,609 | | 461 | | 270 | | 731 | | 38,831 | | (486 | ) | 731 | | 1,079 | | 40,155 | |
Total | | 54,132 | | 512 | | 404 | | 916 | | 49,657 | | (810 | ) | 916 | | 1,079 | | 50,842 | |
Percent leased | | | | | | | | | | 94.1 | % (1) | | | | | | | 93.9 | % |
| | | | | | | | | | | | | | | | | | | |
Metro Philadelphia, PA | | 5,454 | | 59 | | 43 | | 102 | | 5,087 | | (119 | ) | 102 | | — | | 5,070 | |
Metro Washington, DC | | 2,645 | | 22 | | 8 | | 30 | | 2,514 | | (23 | ) | 30 | | — | | 2,521 | |
Oahu, HI | | 17,879 | | 57 | | 43 | | 100 | | 17,407 | | (61 | ) | 100 | | — | | 17,446 | |
Metro Boston, MA | | 2,738 | | 2 | | 45 | | 47 | | 2,650 | | (46 | ) | 47 | | — | | 2,651 | |
Southern California | | 1,444 | | 18 | | 8 | | 26 | | 1,408 | | (19 | ) | 26 | | — | | 1,415 | |
Metro Atlanta, GA | | 2,186 | | 39 | | 2 | | 41 | | 1,697 | | (35 | ) | 41 | | 243 | | 1,946 | |
Metro Austin, TX | | 2,806 | | 117 | | 27 | | 144 | | 2,392 | | (49 | ) | 144 | | — | | 2,487 | |
Other markets | | 18,980 | | 198 | | 228 | | 426 | | 16,502 | | (458 | ) | 426 | | 836 | | 17,306 | |
Total | | 54,132 | | 512 | | 404 | | 916 | | 49,657 | | (810 | ) | 916 | | 1,079 | | 50,842 | |
Percent leased | | | | | | | | | | 94.1 | % (1) | | | | | | | 93.9 | % |
(1) Based on total sq. ft. as of June 30, 2005, excludes acquisitions and effects of space remeasurements during the period.
Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes Wilmington, DE. Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar. Oahu, HI includes all properties located on the island of Oahu.
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HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
TENANTS REPRESENTING 1% OR MORE OF TOTAL RENT
(sq. ft. in thousands)
| | | | | | % of Total | | % of Rental | | | |
Tenant | | Sq. Ft. (1) | | Sq. Ft. | | Income (2) | | Expiration | |
1 | | U.S. Government | | 5,127 | | 10.1 | % | 14.9 | % | 2005 to 2020 | |
2 | | GlaxoSmithKline plc | | 605 | | 1.2 | % | 2.0 | % | 2013 | |
3 | | PNC Financial Services Group | | 488 | | 1.0 | % | 1.6 | % | 2011 | |
4 | | Comcast Corporation | | 406 | | 0.8 | % | 1.3 | % | 2005, 2006, 2008 | |
5 | | Tyco International Ltd | | 660 | | 1.3 | % | 1.3 | % | 2007, 2011 | |
6 | | Solectron Corporation | | 765 | | 1.5 | % | 1.3 | % | 2014 | |
7 | | Towers, Perrin, Forster & Crosby, Inc. | | 388 | | 0.8 | % | 1.3 | % | 2005, 2006, 2011 | |
8 | | Motorola, Inc. | | 770 | | 1.5 | % | 1.2 | % | 2006, 2008, 2010 | |
9 | | Manugistics, Inc. | | 283 | | 0.6 | % | 1.2 | % | 2012 | |
10 | | Ballard Spahr Andrews & Ingersoll, LLP | | 231 | | 0.5 | % | 1.2 | % | 2008, 2015 | |
11 | | Westinghouse Electric Corporation | | 534 | | 1.1 | % | 1.1 | % | 2006, 2010 | |
12 | | Mellon Bank, N.A. | | 234 | | 0.5 | % | 1.0 | % | 2012, 2015 | |
| | Total | | 10,491 | | 20.9 | % | 29.4 | % | | |
(1) Sq. ft. is pursuant to signed leases as of September 30, 2005, and includes (i) space being fitted out for occupancy and (ii )space which is leased, but is not occupied or is being offered for sublease.
(2) Rental income is rents pursuant to signed leases as of September 30, 2005, plus expense reimbursements; includes some triple net lease rents and excludes lease value amortization.
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HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
THREE YEAR LEASE EXPIRATION SCHEDULE BY PROPERTY TYPE
(dollars and sq. ft. in thousands)
| | Total as of
9/30/2005 | | 2005 | | 2006 | | 2007 | | 2008 and
Thereafter | |
| | | | | | | | | | | |
Office: | | | | | | | | | | | |
Total sq. ft. | | 30,364 | | | | | | | | | |
Leased sq. ft. (1) | | 27,916 | | 928 | | 2,826 | | 2,872 | | 21,290 | |
Percent | | 100.0 | % | 3.3 | % | 10.1 | % | 10.3 | % | 76.3 | % |
Annualized rental income (2) | | $ | 619,820 | | $ | 19,779 | | $ | 61,151 | | $ | 65,626 | | $ | 473,264 | |
Percent | | 100.0 | % | 3.2 | % | 9.9 | % | 10.6 | % | 76.3 | % |
| | | | | | | | | | | |
Industrial: | | | | | | | | | | | |
Total sq. ft. | | 23,768 | | | | | | | | | |
Leased sq. ft. (1) | | 22,926 | | 467 | | 782 | | 1,063 | | 20,614 | |
Percent | | 100.0 | % | 2.0 | % | 3.4 | % | 4.6 | % | 90.0 | % |
Annualized rental income (2) | | $ | 110,689 | | $ | 1,941 | | $ | 4,649 | | $ | 7,924 | | $ | 96,175 | |
Percent | | 100.0 | % | 1.8 | % | 4.2 | % | 7.1 | % | 86.9 | % |
| | | | | | | | | | | |
CBD: | | | | | | | | | | | |
Total sq. ft. | | 11,523 | | | | | | | | | |
Leased sq. ft. (1) | | 10,687 | | 295 | | 833 | | 971 | | 8,588 | |
Percent | | 100.0 | % | 2.8 | % | 7.8 | % | 9.1 | % | 80.3 | % |
Annualized rental income (2) | | $ | 282,283 | | $ | 7,871 | | $ | 23,473 | | $ | 27,129 | | $ | 223,810 | |
Percent | | 100.0 | % | 2.8 | % | 8.3 | % | 9.6 | % | 79.3 | % |
| | | | | | | | | | | |
Suburban: | | | | | | | | | | | |
Total sq. ft. | | 42,609 | | | | | | | | | |
Leased sq. ft. (1) | | 40,155 | | 1,100 | | 2,775 | | 2,964 | | 33,316 | |
Percent | | 100.0 | % | 2.7 | % | 6.9 | % | 7.4 | % | 83.0 | % |
Annualized rental income (2) | | $ | 448,226 | | $ | 13,849 | | $ | 42,327 | | $ | 46,421 | | $ | 345,629 | |
Percent | | 100.0 | % | 3.1 | % | 9.4 | % | 10.4 | % | 77.1 | % |
| | | | | | | | | | | |
Total: | | | | | | | | | | | |
Total sq. ft. | | 54,132 | | | | | | | | | |
Leased sq. ft. (1) | | 50,842 | | 1,395 | | 3,608 | | 3,935 | | 41,904 | |
Percent | | 100.0 | % | 2.7 | % | 7.1 | % | 7.7 | % | 82.5 | % |
Annualized rental income (2) | | $ | 730,509 | | $ | 21,720 | | $ | 65,800 | | $ | 73,550 | | $ | 569,439 | |
Percent | | 100.0 | % | 3.0 | % | 9.0 | % | 10.1 | % | 77.9 | % |
(1) Sq. ft. is pursuant to signed leases as of September 30, 2005, and includes (i) space being fitted out for occupancy and (ii) space which is leased, but is not occupied or is being offered for sublease.
(2) Annualized rental income is rents pursuant to signed leases as of September 30, 2005, plus expense reimbursements; includes some triple net lease rents and excludes lease value amortization.
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HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
THREE YEAR LEASE EXPIRATION SCHEDULE BY MAJOR MARKET
(dollars and sq. ft. in thousands)
| | Total as of
9/30/2005 | | 2005 | | 2006 | | 2007 | | 2008 and
Thereafter | |
Metro Philadelphia, PA: | | | | | | | | | | | |
Total sq. ft. | | 5,454 | | | | | | | | | |
Leased sq. ft. (1) | | 5,070 | | 166 | | 250 | | 219 | | 4,435 | |
Percent | | 100.0 | % | 3.3 | % | 4.9 | % | 4.3 | % | 87.5 | % |
Annualized rental income (2) | | $ | 128,136 | | $ | 3,893 | | $ | 7,132 | | $ | 4,193 | | $ | 112,918 | |
Percent | | 100.0 | % | 3.0 | % | 5.6 | % | 3.3 | % | 88.1 | % |
Metro Washington, DC: | | | | | | | | | | | |
Total sq. ft. | | 2,645 | | | | | | | | | |
Leased sq. ft. (1) | | 2,521 | | 98 | | 294 | | 240 | | 1,889 | |
Percent | | 100.0 | % | 3.9 | % | 11.7 | % | 9.5 | % | 74.9 | % |
Annualized rental income (2) | | $ | 76,953 | | $ | 1,857 | | $ | 8,090 | | $ | 6,935 | | $ | 60,071 | |
Percent | | 100.0 | % | 2.4 | % | 10.5 | % | 9.0 | % | 78.1 | % |
Oahu, HI: | | | | | | | | | | | |
Total sq. ft. | | 17,879 | | | | | | | | | |
Leased sq. ft. (1) | | 17,446 | | 364 | | 232 | | 423 | | 16,427 | |
Percent | | 100.0 | % | 2.1 | % | 1.3 | % | 2.4 | % | 94.2 | % |
Annualized rental income (2) | | $ | 55,646 | | $ | 751 | | $ | 795 | | $ | 541 | | $ | 53,559 | |
Percent | | 100.0 | % | 1.3 | % | 1.5 | % | 1.0 | % | 96.2 | % |
Metro Boston, MA | | | | | | | | | | | |
Total sq. ft. | | 2,738 | | | | | | | | | |
Leased sq. ft. (1) | | 2,651 | | 40 | | 164 | | 567 | | 1,880 | |
Percent | | 100.0 | % | 1.5 | % | 6.2 | % | 21.4 | % | 70.9 | % |
Annualized rental income (2) | | $ | 58,809 | | $ | 1,536 | | $ | 3,639 | | $ | 13,764 | | $ | 39,870 | |
Percent | | 100.0 | % | 2.6 | % | 6.2 | % | 23.4 | % | 67.8 | % |
Southern California: | | | | | | | | | | | |
Total sq. ft. | | 1,444 | | | | | | | | | |
Leased sq. ft. (1) | | 1,415 | | 19 | | 192 | | 272 | | 932 | |
Percent | | 100.0 | % | 1.3 | % | 13.6 | % | 19.2 | % | 65.9 | % |
Annualized rental income (2) | | $ | 46,823 | | $ | 647 | | $ | 6,179 | | $ | 8,406 | | $ | 31,591 | |
Percent | | 100.0 | % | 1.4 | % | 13.2 | % | 18.0 | % | 67.4 | % |
Metro Atlanta, GA: | | | | | | | | | | | |
Total sq. ft. | | 2,186 | | | | | | | | | |
Leased sq. ft. (1) | | 1,946 | | 154 | | 129 | | 167 | | 1,496 | |
Percent | | 100.0 | % | 7.9 | % | 6.6 | % | 8.6 | % | 76.9 | % |
Annualized rental income (2) | | $ | 37,470 | | $ | 2,847 | | $ | 2,225 | | $ | 3,218 | | $ | 29,180 | |
Percent | | 100.0 | % | 7.6 | % | 5.9 | % | 8.6 | % | 77.9 | % |
Metro Austin, TX: | | | | | | | | | | | |
Total sq. ft. | | 2,806 | | | | | | | | | |
Leased sq. ft. (1) | | 2,487 | | 42 | | 64 | | 545 | | 1,836 | |
Percent | | 100.0 | % | 1.7 | % | 2.6 | % | 21.9 | % | 73.8 | % |
Annualized rental income (2) | | $ | 41,394 | | $ | 863 | | $ | 1,511 | | $ | 8,719 | | $ | 30,301 | |
Percent | | 100.0 | % | 2.1 | % | 3.6 | % | 21.1 | % | 73.2 | % |
Other markets: | | | | | | | | | | | |
Total sq. ft. | | 18,980 | | | | | | | | | |
Leased sq. ft. (1) | | 17,306 | | 512 | | 2,283 | | 1,502 | | 13,009 | |
Percent | | 100.0 | % | 3.0 | % | 13.2 | % | 8.7 | % | 75.1 | % |
Annualized rental income (2) | | $ | 285,278 | | $ | 9,326 | | $ | 36,229 | | $ | 27,774 | | $ | 211,949 | |
Percent | | 100.0 | % | 3.3 | % | 12.7 | % | 9.7 | % | 74.3 | % |
Total: | | | | | | | | | | | |
Total sq. ft. | | 54,132 | | | | | | | | | |
Leased sq. ft. (1) | | 50,842 | | 1,395 | | 3,608 | | 3,935 | | 41,904 | |
Percent | | 100.0 | % | 2.7 | % | 7.1 | % | 7.7 | % | 82.5 | % |
Annualized rental income (2) | | $ | 730,509 | | $ | 21,720 | | $ | 65,800 | | $ | 73,550 | | $ | 569,439 | |
Percent | | 100.0 | % | 3.0 | % | 9.0 | % | 10.1 | % | 77.9 | % |
(1) Sq. ft. is pursuant to signed leases as of September 30, 2005, and includes (i) space being fitted out for occupancy and (ii) space which is leased, but is not occupied or is being offered for sublease.
(2) Annualized rental income is rents pursuant to signed leases as of September 30, 2005, plus expense reimbursements; includes some triple net lease rents and excludes lease value amortization.
Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes Wilmington, DE. Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar. Oahu, HI includes all properties located on the island of Oahu.
34
HRPT Properties Trust
Supplemental Operating and Financial Data
September 30, 2005
PORTFOLIO LEASE EXPIRATION SCHEDULE
(dollars and sq. ft. in thousands)
| | Sq. Ft.
Expiring (1) | | % of Sq. Ft.
Expiring | | Annualized
Rental Income
Expiring (2) | | % of Annualized Rental Income
Expiring | | Cummulative%
of Annualized
Rental Income
Expiring | |
2005 | | 1,395 | | 2.7 | % | $ | 21,720 | | 3.0 | % | 3.0 | % |
2006 | | 3,608 | | 7.1 | % | 65,800 | | 9.0 | % | 12.0 | % |
2007 | | 3,935 | | 7.7 | % | 73,550 | | 10.1 | % | 22.1 | % |
2008 | | 4,002 | | 7.9 | % | 71,090 | | 9.7 | % | 31.8 | % |
2009 | | 3,198 | | 6.3 | % | 55,994 | | 7.7 | % | 39.5 | % |
2010 | | 4,509 | | 8.9 | % | 77,400 | | 10.6 | % | 50.1 | % |
2011 | | 4,185 | | 8.2 | % | 74,661 | | 10.2 | % | 60.3 | % |
2012 | | 2,933 | | 5.8 | % | 60,681 | | 8.3 | % | 68.6 | % |
2013 | | 1,801 | | 3.5 | % | 33,354 | | 4.5 | % | 73.1 | % |
2014 | | 1,876 | | 3.7 | % | 31,852 | | 4.4 | % | 77.5 | % |
2015 and thereafter | | 19,400 | | 38.2 | % | 164,407 | | 22.5 | % | 100.0 | % |
Total | | 50,842 | | 100.0 | % | $ | 730,509 | | 100.0 | % | | |
| | | | | | | | | | | |
Weighted average remaining lease term (in years) | | 10.0 | | | | 6.6 | | | | | |
(1) Sq. ft. is pursuant to signed leases as of September 30, 2005, and includes (i) space being fitted out for occupancy and (ii) space which is leased, but is not occupied or is being offered for sublease.
(2) Annualized rental income is rents pursuant to signed leases as of September 30, 2005, plus expense reimbursements; includes some triple net lease rents and excludes lease value amortization.
35
