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Supplemental Information
(Unaudited)
December 31, 2000
Corporate Office Properties Trust
Index to Supplemental Information (Unaudited)
December 31, 2000
| Page | ||
---|---|---|---|
Highlights and Discussion | |||
Shareholder Return | 1 | ||
Reporting Period Highlights-Fourth Quarter 2000 | 1 | ||
Reporting Period Highlights-Year Ended December 31, 2000 | 2 | ||
Subsequent Events | 3 | ||
Financial Statements | |||
Quarterly Selected Financial Summary Data | 4 | ||
Quarterly Consolidated Balance Sheets | 5 | ||
Quarterly Consolidated Statements of Operations and Funds From Operations (FFO) | 6 | ||
Quarterly Consolidated Statements of Operations and FFO per Diluted Share | 7 | ||
Quarterly Consolidated Statements of Operations and FFO as a Percentage of Total Revenues | 8 | ||
Annual Selected Financial Summary Data | 9 | ||
Annual Consolidated Balance Sheets | 10 | ||
Annual Consolidated Statements of Operations and Funds From Operations (FFO) | 11 | ||
Annual Consolidated Statements of Operations and FFO per Diluted Share | 12 | ||
Annual Consolidated Statements of Operations and FFO as a Percentage of Total Revenues | 13 | ||
Selected Financial Analyses | |||
Quarterly Equity Analysis | 14 | ||
Quarterly Valuation Analysis | 15 | ||
Quarterly Debt Analysis | 16 | ||
Quarterly Operating Ratios | 17 | ||
Quarterly Dividend Analysis | 18 | ||
Investor Composition and Analyst Coverage | 19 | ||
Debt Maturity Schedule—December 31, 2000 | 20 | ||
Portfolio Summary | |||
Property Summary by Region -December 31, 2000 | 21 | ||
Property Occupancy Rates by Region by Quarter | 23 | ||
Top Twenty Office Tenants as of December 31, 2000 | 24 | ||
Total Rental Revenue and Net Operating Income by Geographic Region by Quarter | 25 | ||
Same Office Property Cash and GAAP Net Operating Income by Quarter | 26 | ||
Office Lease Expiration Analysis by Year | 27 | ||
Year to Date and Quarterly Office Renewal Analysis | 28 | ||
Acquisition and Disposition Summary as of December 31, 2000 | 30 | ||
Development Summary as of December 31, 2000 | 31 |
To Members of the Investment Community:
We prepared this supplemental information package to provide you with additional detail on our properties and operations. The information in this package is unaudited, filed with the Securities and Exchange Commission and should be read in conjunction with our quarterly and annual reports. If you have any questions or comments, please contact Ms. Sara L. Grootwassink, Vice President, Finance and Investor Relations at (410) 992-7324 or sara.grootwassink@copt.com.
Shareholder Return
Our shareholders earned a total return of 41.9% for the year 2000. As measured by the National Association of Real Estate Investment Trusts (NAREIT), our shareholders realized a two-year total return of 60.1% for the period ended December 31, 2000, first among all office REITS. This return computation includes dividends and share price appreciation.
Reporting Period Highlights—Fourth Quarter 2000
Financial Results
- •
- Reported FFO—diluted of $9,804,000 or $.31 per share/unit for the fourth quarter of 2000 as compared to $8,240,000 or $.28 per share/unit for the comparable 1999 period, representing an increase of 10.7% per share/unit. FFO—diluted increased $1,564,000, or 19.0%, over the comparable 1999 period.
- •
- Reported AFFO—diluted of $8,228,000 or $.26 per share/unit for the fourth quarter of 2000 as compared to $6,818,000 or $.23 per share/unit for the comparable 1999 period, representing an increase of 13.0% per share/unit.
Financing and Capital Transactions
- •
- Our debt to market capitalization is 57.3% and our debt to undepreciated book value of real estate assets is 60.4% as of December 31, 2000. We achieved an EBITDA interest coverage ratio of 2.33x for this quarter and 2.38x for the year.
- •
- We closed on two construction loans for $17,750,000 with an interest rate of LIBOR plus 175 and an average term of 2.75 years, including extension options.
- •
- We obtained permanent loan commitments for $39.6 million, with an interest rate of 7.9% and terms of seven years.
Operations
- •
- We renewed 65.8% of our office leases (based upon square footage) representing 56,037 square feet with an average capital cost of $9.72 per square foot during the 4th quarter. We realized increases in base and total rents on a straight-line basis of 17.7% and 10.6%, respectively, as measured from the GAAP straight-line rent in effect preceding the renewal date. Base and total rent on a cash basis increased 13.2% and 6.7%, respectively, on this renewed and retenanted space.
- •
- Overall occupancy was 97.0% as of December 31, 2000. Occupancy rates exceeded 97.8% in the Baltimore/Washington Corridor, which represents 59.7% of our office square footage and 63.1% of our total office revenues for the 4th quarter of 2000. We were 98.2% leased as of December 31, 2000 for our office portfolio.
1
- •
- Weighted average lease term of our office portfolio is 4.6 years as of December 31, 2000, with an average contractual rental rate (including tenant reimbursements for operating costs) of $17.31 per square foot.
- •
- Same office properties constitute 70 buildings of which 54.3% are located in the Baltimore/Washington Corridor. In the fourth quarter of 2000, these same office properties contributed 80.8% of our office portfolio's revenues. Same property cash NOI increased 6.0% over the fourth quarter of 1999. This same property cash NOI represents 75.5% of our fourth quarter cash NOI.
Development
- •
- We have five buildings under construction totaling approximately 569,349 square feet with an anticipated cost of $95.5 million and 49.1% pre-leased. We delivered two buildings in the fourth quarter totaling 137,673 square feet with an average lease-up of 76.9%.
- •
- Our three properties under development, which are anticipated to start in 2001, will add 277,239 square feet to our portfolio and are anticipated to cost $40.9 million.
- •
- This combined planned growth represents 13.1% of the existing square footage of our operating properties as of December 31, 2000 and 18.1% of our net investment in real estate.
Reporting Period Highlights—Year Ended December 31, 2000
Financial Results
- •
- Reported FFO—diluted of $37,504,000 or $1.17 per share/unit as compared to $31,401,000 or $1.07 per share/unit for the same period in 1999, representing an increase of 9.3% per share/unit. Similarly, reported AFFO—diluted of $30,554,000 or $.95 per share/unit for the same period as compared to $26,056,000 or $.89 per share/unit, representing an increase of 6.7% per share/unit.
Acquisitions/Dispositions
- •
- We accomplished our strategic objective to exit the retail segment with the sale of two retail properties and realized $3,583,000 in cash proceeds after debt repayment.
- •
- We purchased two office properties located in the Baltimore/Washington Corridor for $14,613,000. The properties contain 223,500 square feet, which equates to an average cost of $65.38 per square foot. We expect to realize a 17.3% average unleveraged cash on cash return on these acquisitions.
Financing and Capital Transactions
- •
- We paid common share dividends of $.78 per share in 2000, representing an increase of 5.4% over 1999.
- •
- We obtained $49,890,000 of new construction loan commitments ($18,447,000 has been drawn as of December 31, 2000) and raised $6,080,000 of net cash proceeds from investment in joint venture arrangements in connection with our development properties.
- •
- We refinanced three maturing construction loans into two permanent financings of $25,650,000 with an average interest rate of 8.32% over an average term of 5.31 years.
- •
- We purchased $125,000,000 of interest rate caps which limit LIBOR to rates ranging from 7.0% to 7.7% over terms expiring between October 2001 and May 2002.
2
- •
- We achieved FFO and AFFO payout ratios of 67.0% and 82.2% for the year.
- •
- We initiated our share repurchase plan and acquired 166,600 shares during the year for an average cost of $8.50 per share.
Operations
- •
- We executed new or renewed leases for 1,364,000 square feet in 2000, representing an increase in volume of 431,000 square feet and 46.2% over the prior year.
- •
- We achieved a 69.6% retention ratio during the year, coupled with a 15.7% increase in base rent on a straight-line basis on renewed and retenanted square footage, with an average capital cost of $9.28 per square foot. We realized a cash total rent (base rent and operating expense recoveries) increase of 5.7% on this same space.
- •
- We ended the year 97.0% occupied and 98.2% leased.
Development/Redevelopment
- •
- We completed five buildings totaling 380,760 square feet during 2000 with an average lease-up of 91.7% at the date placed into service.
- •
- We commenced development on four buildings totaling 427,239 square feet located in the Baltimore/Washington Corridor, in response to tenant demand. These development assets are located within our existing office parks.
Subsequent Events
- •
- In January 2001, we issued 544,000 Series D convertible preferred shares with a liquidation value of $25.00 per share, raising $11,968,000. The preferred shares have a 4% coupon and are convertible into common shares at a ratio of 2.2 to 1 (effective conversion price of $11.36 per common share).
- •
- Effective in January 2001, we executed a two-year, $100 million notional amount swap exchanging floating 30-day LIBOR for fixed LIBOR at 5.76%.
- •
- We acquired the remaining voting interests in Corporate Office Management, Inc. (COMI) and now own 100% of this service organization. Upon completion of this transaction, we elected to treat COMI as a taxable REIT subsidiary.
Note: This supplemental information contains "forward looking" statements, as defined in the Private Securities Litigation Reform Act of 1995, that are based on the Company's current expectations, estimates and projections about future events and financial trends affecting the financial condition of the business. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. These statements are not guarantees of future performance, events or results and involve potential risks and uncertainties. Accordingly, actual results may differ materially. The Company undertakes no obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For further information, please refer to the Company's filings with the Securities and Exchange Commission.
3
Quarterly Selected Financial Summary Data
(Dollars in thousands)
| 2000 | 1999 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||||||
Total Revenues | $ | 28,676 | $ | 28,039 | $ | 26,417 | $ | 25,861 | $ | 22,587 | |||||||
Net Operating Income | 20,536 | 19,989 | 18,980 | 18,253 | 16,701 | ||||||||||||
EBITDA | 19,298 | 18,559 | 17,772 | 16,952 | 15,728 | ||||||||||||
Net Income before Preferred Dividends | 4,087 | 3,685 | 3,712 | 3,649 | 3,934 | ||||||||||||
Preferred Dividends | (782 | ) | (781 | ) | (1,119 | ) | (1,120 | ) | (1,118 | ) | |||||||
Net Income Available to Common Shareholders | $ | 3,305 | $ | 2,904 | $ | 2,593 | $ | 2,530 | $ | 2,816 | |||||||
Funds From Operations (FFO)—Diluted | $ | 9,804 | $ | 9,550 | $ | 9,250 | $ | 8,900 | $ | 8,240 | |||||||
FFO per diluted share | $ | 0.31 | $ | 0.30 | $ | 0.29 | $ | 0.28 | $ | 0.28 | |||||||
Adjusted FFO—Diluted(A) | $ | 8,228 | $ | 6,691 | $ | 7,634 | $ | 7,429 | $ | 6,818 | |||||||
Adjusted FFO per diluted share | $ | 0.26 | $ | 0.23 | $ | 0.24 | $ | 0.23 | $ | 0.23 | |||||||
Payout Ratios: | |||||||||||||||||
FFO—Diluted(B) | 65.67% | 67.42% | 66.02% | 68.95% | 68.54% | ||||||||||||
AFFO—Diluted(C) | 78.25% | 87.68% | 80.00% | 82.61% | 82.83% | ||||||||||||
Total Dividends/Distributions | $ | 7,220 | $ | 7,220 | $ | 6,888 | $ | 6,918 | $ | 6,427 |
- (A)
- For the quarter ended September 30, 2000, the Series C convertible preferred units were anti-dilutive for AFFO calculations. Thus, in computing AFFO, the quarterly dividend of $572 was included in the numerator and the related 2,421 of Series C convertible preferred units (as if already converted into common shares) were excluded from the denominator.
- (B)
- Computed by dividing total dividends/distributions (except for dividends on Series B Cumulative Redeemable Preferred Shares which are subtracted to calculate FFO) by FFO diluted.
- (C)
- Computed by dividing total dividends/distributions (except for dividends on Series B Cumulative Redeemable Preferred Shares which are subtracted to calculate AFFO) by AFFO diluted. In addition, for the quarter ended September 30, 2000, the quarterly Series C preferred unit dividend of $572 was excluded from the numerator.
4
Quarterly Consolidated Balance Sheets
(Dollars in thousands except per share data)
| 2000 | 1999 | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||||||||
Assets | |||||||||||||||||||
Investment in real estate: | |||||||||||||||||||
Land—operational | $ | 140,018 | $ | 136,723 | $ | 141,646 | $ | 137,075 | $ | 135,641 | |||||||||
Land—development | 19,069 | 21,888 | 15,888 | 16,332 | 13,158 | ||||||||||||||
Construction in progress | 17,131 | 21,579 | 20,300 | 25,832 | 20,667 | ||||||||||||||
Buildings and improvements | 604,666 | 585,067 | 575,531 | 551,332 | 544,967 | ||||||||||||||
Investment in and advances to real estate joint ventures | 3,974 | 8,606 | — | — | — | ||||||||||||||
Furniture, fixtures and equipment | 344 | 345 | 345 | 345 | 335 | ||||||||||||||
Less: accumulated depreciation | (33,468 | ) | (29,639 | ) | (25,650 | ) | (22,027 | ) | (18,279 | ) | |||||||||
Net investment in real estate | 751,734 | 744,569 | 728,060 | 708,889 | 696,489 | ||||||||||||||
Cash and cash equivalents | 4,981 | 3,259 | 630 | 869 | 2,376 | ||||||||||||||
Restricted cash | 2,703 | 2,007 | 2,903 | 2,507 | 2,041 | ||||||||||||||
Accounts receivable, net | 3,245 | 3,571 | 3,386 | 2,080 | 1,928 | ||||||||||||||
Investment in and advances to other unconsolidated entities | 6,124 | 4,074 | 4,095 | 4,393 | 3,661 | ||||||||||||||
Deferred rent receivable | 8,644 | 7,882 | 6,010 | 5,378 | 4,634 | ||||||||||||||
Deferred charges, net | 12,905 | 12,667 | 10,953 | 8,133 | 7,525 | ||||||||||||||
Prepaid and other assets | 4,501 | 6,836 | 4,197 | 2,551 | 2,380 | ||||||||||||||
Total assets | $ | 794,837 | $ | 784,865 | $ | 760,234 | $ | 734,800 | $ | 721,034 | |||||||||
Liabilities and beneficiaries' equity | |||||||||||||||||||
Liabilities: | |||||||||||||||||||
Mortgage loans payable | $ | 474,349 | $ | 465,696 | $ | 436,679 | $ | 412,191 | $ | 399,627 | |||||||||
Accounts payable and accrued expenses | 10,227 | 6,435 | 11,245 | 7,929 | 6,597 | ||||||||||||||
Rents received in advance and security deposits | 3,883 | 5,351 | 4,277 | 4,168 | 3,776 | ||||||||||||||
Dividends/distributions payable | 7,090 | 7,090 | 6,757 | 6,787 | 6,298 | ||||||||||||||
Total liabilities | 495,549 | 484,572 | 458,958 | 431,075 | 416,298 | ||||||||||||||
Minority interests: | |||||||||||||||||||
Preferred Units in the Operating Partnership | 24,367 | 24,367 | 24,367 | 24,367 | 24,367 | ||||||||||||||
Common Units in the Operating Partnership | 81,069 | 81,402 | 78,720 | 80,422 | 88,170 | ||||||||||||||
Other consolidated partnership | 124 | 115 | 109 | 106 | 98 | ||||||||||||||
Total minority interests | 105,560 | 105,884 | 103,196 | 104,895 | 112,635 | ||||||||||||||
Commitments and contingencies | — | — | — | — | — | ||||||||||||||
Beneficiaries' equity: | |||||||||||||||||||
Preferred Shares ($0.01 par value; 5,000,000 authorized); | |||||||||||||||||||
1,025,000 designated as Series A Convertible Preferred Shares of beneficial interest (1 share issued as of December 31, 2000) | — | — | 10 | 10 | 10 | ||||||||||||||
1,725,000 designated as Series B Cumulative Redeemable Preferred Shares of beneficial interest (1,250,000 shares issued as of December 31, 2000) | 12 | 12 | 12 | 12 | 12 | ||||||||||||||
Common Shares of beneficial interest ($0.01 par value; 45,000,000 authorized, 20,575,936 shares issued as of December 31, 2000) | 206 | 206 | 187 | 185 | 176 | ||||||||||||||
Treasury Shares, at cost (166,600 shares as of December 31, 2000) | (1,415 | ) | (1,415 | ) | (1,415 | ) | (52 | ) | — | ||||||||||
Additional paid-in capital | 209,388 | 209,384 | 211,978 | 210,524 | 202,867 | ||||||||||||||
Accumulated deficit | (11,064 | ) | (10,379 | ) | (9,293 | ) | (8,450 | ) | (7,547 | ) | |||||||||
Value of unearned restricted Common Share grants | (3,399 | ) | (3,399 | ) | (3,399 | ) | (3,399 | ) | (3,417 | ) | |||||||||
Total beneficiaries' equity | 193,728 | 194,409 | 198,080 | 198,830 | 192,101 | ||||||||||||||
Total beneficiaries' equity and minority interests | 299,288 | 300,293 | 301,276 | 303,725 | 304,736 | ||||||||||||||
Total liabilities and beneficiaries' equity | $ | 794,837 | $ | 784,865 | $ | 760,234 | $ | 734,800 | $ | 721,034 | |||||||||
Note: Other unconsolidated entities include Corporate Office Services, Inc. (COS); Corporate Office Management, Inc. (COMI); Corporate Development Services, LLC (CDS); MediTract, LLC; Corporate Management Services, LLC (CMS); Corporate Realty Management, LLC (CRM); and Martin G. Knott and Associates, LLC.
5
Quarterly Consolidated Statements of Operations and Funds From Operations (FFO)
(Dollars and units in thousands)
| 2000 | 1999 | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||||||
Revenues | ||||||||||||||||||
Rental revenue | $ | 24,269 | $ | 23,980 | $ | 23,154 | $ | 21,906 | $ | 19,222 | ||||||||
Tenant recoveries and other revenue | 4,407 | 4,059 | 3,263 | 3,955 | 3,365 | |||||||||||||
Total Revenues | 28,676 | 28,039 | 26,417 | 25,861 | 22,587 | |||||||||||||
Expenses | ||||||||||||||||||
Property operating | 3,220 | 3,596 | 3,049 | 2,883 | 2,278 | |||||||||||||
Repairs and maintenance | 3,491 | 3,018 | 3,065 | 3,439 | 2,485 | |||||||||||||
Real estate taxes | 1,429 | 1,436 | 1,323 | 1,286 | 1,123 | |||||||||||||
Total Property Expenses | 8,140 | 8,050 | 7,437 | 7,608 | 5,886 | |||||||||||||
Net Operating Income | 20,536 | 19,989 | 18,980 | 18,253 | 16,701 | |||||||||||||
General and administrative | (1,040 | ) | (1,319 | ) | (1,160 | ) | (1,348 | ) | (888 | ) | ||||||||
Equity in (loss) income of unconsolidated entities | (198 | ) | (111 | ) | (48 | ) | 47 | (85 | ) | |||||||||
EBITDA | 19,298 | 18,559 | 17,772 | 16,952 | 15,728 | |||||||||||||
Interest expense | (8,266 | ) | (7,850 | ) | (7,404 | ) | (6,934 | ) | (6,399 | ) | ||||||||
Series B Preferred Share dividends | (782 | ) | (781 | ) | (780 | ) | (781 | ) | (780 | ) | ||||||||
Amortization of deferred financing costs | (416 | ) | (349 | ) | (311 | ) | (306 | ) | (260 | ) | ||||||||
Depreciation on unconsolidated real estate entities | (4 | ) | (3 | ) | (3 | ) | (3 | ) | (22 | ) | ||||||||
Minority interestholders' share of operations | (9 | ) | (6 | ) | (4 | ) | (7 | ) | (8 | ) | ||||||||
Depreciation of corporate FF&E | (17 | ) | (20 | ) | (20 | ) | (20 | ) | (19 | ) | ||||||||
Funds From Operations (FFO)—Diluted | 9,804 | 9,550 | 9,250 | 8,900 | 8,240 | |||||||||||||
Depreciation and other amortization | (4,485 | ) | (4,275 | ) | (4,287 | ) | (3,853 | ) | (3,290 | ) | ||||||||
Gain on property sales | 50 | — | 57 | — | — | |||||||||||||
Loss on early extinguishment of debt | (2 | ) | (109 | ) | (42 | ) | — | (65 | ) | |||||||||
Depreciation on unconsolidated real estate entities | 4 | 3 | 3 | 3 | 16 | |||||||||||||
Minority interestholders' share of operations | 9 | 6 | 4 | 7 | 14 | |||||||||||||
Series B Preferred Share dividends | 782 | 781 | 780 | 781 | 780 | |||||||||||||
Income Before Minority Interests and Preferred Share dividends | 6,162 | 5,956 | 5,765 | 5,839 | 5,695 | |||||||||||||
Minority Interests: | ||||||||||||||||||
Preferred Units in Operating Partnership | (572 | ) | (572 | ) | (548 | ) | (548 | ) | (61 | ) | ||||||||
Common Units in Operating Partnership | (1,494 | ) | (1,693 | ) | (1,501 | ) | (1,634 | ) | (1,692 | ) | ||||||||
Other consolidated partnership | (9 | ) | (6 | ) | (4 | ) | (7 | ) | (8 | ) | ||||||||
Preferred Share dividends | (782 | ) | (781 | ) | (1,119 | ) | (1,120 | ) | (1,118 | ) | ||||||||
Net Income Available to Common Shareholders | $ | 3,305 | $ | 2,904 | $ | 2,593 | $ | 2,530 | $ | 2,816 | ||||||||
Funds From Operations (FFO)—Diluted | $ | 9,804 | $ | 9,550 | $ | 9,250 | $ | 8,900 | $ | 8,240 | ||||||||
Preferred Units in Operating Partnership(1) | — | (572 | ) | — | — | — | ||||||||||||
Straight line rents | (800 | ) | (1,872 | ) | (693 | ) | (742 | ) | (632 | ) | ||||||||
Non-incremental capital expenditures | (776 | ) | (415 | ) | (923 | ) | (729 | ) | (790 | ) | ||||||||
Adjusted Funds from Operations—Diluted | $ | 8,228 | $ | 6,691 | $ | 7,634 | $ | 7,429 | $ | 6,818 | ||||||||
Preferred dividends/distributions(2) | 1,353 | 1,353 | 1,668 | 1,668 | 1,179 | |||||||||||||
Common dividends/distributions | 5,867 | 5,867 | 5,220 | 5,250 | 5,248 | |||||||||||||
Total Dividends/Distributions | $ | 7,220 | $ | 7,220 | $ | 6,888 | $ | 6,918 | $ | 6,427 | ||||||||
- (1)
- For the quarter ended September 30, 2000, the Series C convertible preferred units were anti-dilutive for AFFO calculations. Thus, in computing AFFO, the quarterly dividend of $572 was included in the numerator and the related 2,421 of Series C convertible preferred units (as if already converted into common shares) were excluded from the denominator.
- (2)
- Includes Series B Cumulative Redeemable Preferred Share dividends deducted for FFO/AFFO computations.
6
Quarterly Consolidated Statements of Operations and FFO per Diluted Share
(Shares in thousands)
| 2000 | 1999 | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||||||
Revenues | ||||||||||||||||||
Rental revenue | $ | 0.76 | $ | 0.75 | $ | 0.71 | $ | 0.68 | $ | 0.65 | ||||||||
Tenant recoveries and other revenue | 0.14 | 0.13 | 0.10 | 0.12 | 0.11 | |||||||||||||
Total Revenues | 0.90 | 0.88 | 0.82 | 0.80 | 0.76 | |||||||||||||
Expenses | ||||||||||||||||||
Property operating | 0.10 | 0.11 | 0.09 | 0.09 | 0.08 | |||||||||||||
Repairs and maintenance | 0.11 | 0.09 | 0.09 | 0.11 | 0.08 | |||||||||||||
Real estate taxes | 0.04 | 0.04 | 0.04 | 0.04 | 0.04 | |||||||||||||
Total Property Expenses | 0.25 | 0.25 | 0.23 | 0.24 | 0.20 | |||||||||||||
Net Operating Income | 0.64 | 0.63 | 0.59 | 0.56 | 0.56 | |||||||||||||
General and administrative | (0.03 | ) | (0.04 | ) | (0.04 | ) | (0.04 | ) | (0.03 | ) | ||||||||
Equity in (loss) income of unconsolidated entities | (0.01 | ) | (0.00 | ) | (0.00 | ) | 0.00 | (0.00 | ) | |||||||||
EBITDA | 0.60 | 0.58 | 0.55 | 0.52 | 0.53 | |||||||||||||
Interest expense | (0.26 | ) | (0.25 | ) | (0.23 | ) | (0.21 | ) | (0.22 | ) | ||||||||
Series B Preferred Share dividends | (0.02 | ) | (0.02 | ) | (0.02 | ) | (0.02 | ) | (0.03 | ) | ||||||||
Amortization of deferred financing costs | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | ||||||||
Depreciation on unconsolidated real estate entities | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | ||||||||
Minority interestholders' share of operations | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | ||||||||
Depreciation of corporate FF&E | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | ||||||||
Funds From Operations (FFO)—Diluted | 0.31 | 0.30 | 0.29 | 0.28 | 0.28 | |||||||||||||
Depreciation and other amortization | (0.14 | ) | (0.13 | ) | (0.13 | ) | (0.12 | ) | (0.11 | ) | ||||||||
Gain on property sales | 0.00 | — | 0.00 | — | — | |||||||||||||
Loss on early extinguishment of debt | (0.00 | ) | (0.00 | ) | (0.00 | ) | — | (0.00 | ) | |||||||||
Depreciation on unconsolidated real estate entities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||
Minority interestholders' share of operations | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||
Series B Preferred Share dividends | 0.02 | 0.02 | 0.02 | 0.02 | 0.03 | |||||||||||||
Income Before Minority Interests and Preferred Share dividends | 0.19 | 0.19 | 0.18 | 0.18 | 0.19 | |||||||||||||
Minority Interests: | ||||||||||||||||||
Preferred Units in Operating Partnership | (0.02 | ) | (0.02 | ) | (0.02 | ) | (0.02 | ) | (0.00 | ) | ||||||||
Common Units in Operating Partnership | (0.05 | ) | (0.05 | ) | (0.05 | ) | (0.05 | ) | (0.06 | ) | ||||||||
Other consolidated partnership | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | ||||||||
Preferred Share dividends | (0.02 | ) | (0.02 | ) | (0.03 | ) | (0.03 | ) | (0.04 | ) | ||||||||
Net Income Available to Common Shareholders | $ | 0.10 | $ | 0.09 | $ | 0.08 | $ | 0.08 | $ | 0.09 | ||||||||
Funds From Operations (FFO)—Diluted | $ | 0.31 | $ | 0.30 | $ | 0.29 | $ | 0.28 | $ | 0.28 | ||||||||
Preferred Units in Operating Partnership | — | (0.02 | ) | — | — | — | ||||||||||||
Straight line rents | (0.02 | ) | (0.06 | ) | (0.02 | ) | (0.02 | ) | (0.02 | ) | ||||||||
Non-incremental capital expenditures | (0.02 | ) | (0.01 | ) | (0.03 | ) | (0.02 | ) | (0.03 | ) | ||||||||
Adjusted Funds from Operations—Diluted | $ | 0.26 | $ | 0.23 | $ | 0.24 | $ | 0.23 | $ | 0.23 | ||||||||
For FFO Computations: | ||||||||||||||||||
Weighted Average Converted Preferred Shares/Units | 2,421 | 2,421 | 4,642 | 4,642 | 2,123 | |||||||||||||
Weighted Average Common Shares/Units Outstanding | 29,611 | 29,561 | 27,750 | 27,683 | 27,620 | |||||||||||||
Weighted Average Diluted Shares Outstanding | 32,032 | 31,982 | 32,393 | 32,325 | 29,743 | |||||||||||||
For AFFO Computations: | ||||||||||||||||||
Weighted Average Converted Preferred Shares/Units | 2,421 | — | 4,642 | 4,642 | 2,123 | |||||||||||||
Weighted Average Common Shares/Units Outstanding | 29,611 | 29,561 | 27,750 | 27,683 | 27,620 | |||||||||||||
Weighted Average Diluted Shares Outstanding | 32,032 | 29,561 | 32,393 | 32,325 | 29,743 | |||||||||||||
7
Quarterly Consolidated Statements of Operations and FFO as a Percentage of Total Revenues
| 2000 | 1999 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||
Revenues | |||||||||||||
Rental revenue | 85% | 86% | 88% | 85% | 85% | ||||||||
Tenant recoveries and other revenue | 15% | 14% | 12% | 15% | 15% | ||||||||
Total Revenues | 100% | 100% | 100% | 100% | 100% | ||||||||
Expenses | |||||||||||||
Property operating | 11% | 13% | 12% | 11% | 10% | ||||||||
Repairs and maintenance | 12% | 11% | 12% | 13% | 11% | ||||||||
Real estate taxes | 5% | 5% | 5% | 5% | 5% | ||||||||
Total Property Expenses | 28% | 29% | 28% | 29% | 26% | ||||||||
Net Operating Income | 72% | 71% | 72% | 71% | 74% | ||||||||
General and administrative | (4% | ) | (5% | ) | (4% | ) | (5% | ) | (4% | ) | |||
Equity in (loss) income of unconsolidated entities | (1% | ) | (0% | ) | (0% | ) | 0% | (0% | ) | ||||
EBITDA | 67% | 66% | 67% | 66% | 70% | ||||||||
Interest expense | (29% | ) | (28% | ) | (28% | ) | (27% | ) | (28% | ) | |||
Series B Preferred Share dividends | (3% | ) | (3% | ) | (3% | ) | (3% | ) | (3% | ) | |||
Amortization of deferred financing costs | (1% | ) | (1% | ) | (1% | ) | (1% | ) | (1% | ) | |||
Depreciation on unconsolidated real estate entities | (0% | ) | (0% | ) | (0% | ) | (0% | ) | (0% | ) | |||
Minority interestholders' share of operations | (0% | ) | (0% | ) | (0% | ) | (0% | ) | (0% | ) | |||
Depreciation of corporate FF&E | (0% | ) | (0% | ) | (0% | ) | (0% | ) | (0% | ) | |||
Funds From Operations (FFO)—Diluted | 34% | 34% | 35% | 34% | 36% | ||||||||
Depreciation and other amortization | (16% | ) | (15% | ) | (16% | ) | (15% | ) | (15% | ) | |||
Gain on property sales | 0% | 0% | 0% | 0% | 0% | ||||||||
Loss on early extinguishment of debt | (0% | ) | (0% | ) | (0% | ) | 0% | (0% | ) | ||||
Depreciation on unconsolidated real estate entities | 0% | 0% | 0% | 0% | 0% | ||||||||
Minority interestholders' share of operations | 0% | 0% | 0% | 0% | 0% | ||||||||
Series B Preferred Share dividends | 3% | 3% | 3% | 3% | 3% | ||||||||
Income Before Minority Interests and Preferred Share dividends | 21% | 21% | 22% | 23% | 25% | ||||||||
Minority Interests: | |||||||||||||
Preferred Units in Operating Partnership | (2% | ) | (2% | ) | (2% | ) | (2% | ) | (0% | ) | |||
Common Units in Operating Partnership | (5% | ) | (6% | ) | (6% | ) | (6% | ) | (7% | ) | |||
Other consolidated partnership | (0% | ) | (0% | ) | (0% | ) | (0% | ) | (0% | ) | |||
Preferred Share dividends | (3% | ) | (3% | ) | (4% | ) | (4% | ) | (5% | ) | |||
Net Income Available to Common Shareholders | 12% | 10% | 10% | 10% | 12% | ||||||||
Funds From Operations (FFO)—Diluted | 34% | 34% | 35% | 34% | 36% | ||||||||
Preferred Units in Operating Partnership | 0% | (2% | ) | 0% | 0% | 0% | |||||||
Straight line rents | (3% | ) | (7% | ) | (3% | ) | (3% | ) | (3% | ) | |||
Non-incremental capital expenditures | (3% | ) | (1% | ) | (3% | ) | (3% | ) | (3% | ) | |||
Adjusted Funds from Operations—Diluted | 29% | 24% | 29% | 29% | 30% | ||||||||
8
Annual Selected Financial Summary Data
(Dollars in thousands)
| December 31 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
| 2000 | 1999 | 1998 | ||||||||
Total Revenues | $ | 108,993 | $ | 81,112 | $ | 40,214 | |||||
Net Operating Income | 77,758 | 58,787 | 30,582 | ||||||||
EBITDA | 72,581 | 55,781 | 28,831 | ||||||||
Net Income | 15,134 | 15,083 | 4,696 | ||||||||
Preferred Dividends | (3,802 | ) | (2,854 | ) | (327 | ) | |||||
Net Income Available to Common Shareholders | $ | 11,332 | $ | 12,229 | $ | 4,369 | |||||
Funds From Operations (FFO)—Diluted | $ | 37,504 | $ | 31,401 | $ | 16,154 | |||||
FFO per diluted share | $ | 1.17 | $ | 1.07 | $ | 0.82 | |||||
Adjusted FFO—Diluted | $ | 30,554 | $ | 26,056 | $ | 13,831 | |||||
Adjusted FFO per diluted share | $ | 0.95 | $ | 0.89 | $ | 0.70 | |||||
Payout Ratios: | |||||||||||
FFO—Diluted(A) | 66.98% | 64.31% | 74.63% | ||||||||
AFFO—Diluted(B) | 82.22% | 77.50% | 87.17% | ||||||||
Total Dividends/Distributions | $ | 28,246 | $ | 21,694 | $ | 12,056 |
- (A)
- Computed by dividing total dividends/distributions (except for dividends on Series B Cumulative Redeemable Preferred Shares which are subtracted to calculate FFO) by FFO diluted.
- (B)
- Computed by dividing total dividends/distributions (except for dividends on Series B Cumulative Redeemable Preferred Shares which are subtracted to calculate AFFO) by AFFO diluted.
9
Annual Consolidated Balance Sheets
(Dollars in thousands except per share data)
| December 31 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2000 | 1999 | 1998 | |||||||||
Assets | ||||||||||||
Investment in real estate: | ||||||||||||
Land—operational | $ | 140,018 | $ | 135,641 | $ | 108,433 | ||||||
Land—development | 19,069 | 13,158 | 8,941 | |||||||||
Construction in progress | 17,131 | 20,667 | 1,718 | |||||||||
Buildings and improvements | 604,666 | 544,967 | 436,932 | |||||||||
Investment in and advances to real estate joint ventures | 3,974 | — | — | |||||||||
Furniture, fixtures and equipment | 344 | 335 | 332 | |||||||||
Less: accumulated depreciation | (33,468 | ) | (18,279 | ) | (9,469 | ) | ||||||
Net investment in real estate | 751,734 | 696,489 | 546,887 | |||||||||
Cash and cash equivalents | 4,981 | 2,376 | 2,349 | |||||||||
Restricted cash | 2,703 | 2,041 | 293 | |||||||||
Accounts receivable, net | 3,245 | 1,928 | 2,986 | |||||||||
Investment in and advances to other unconsolidated entities | 6,124 | 3,661 | 2,351 | |||||||||
Deferred rent receivable | 8,644 | 4,634 | 2,263 | |||||||||
Deferred charges, net | 12,905 | 7,525 | 3,542 | |||||||||
Prepaid and other assets | 4,501 | 2,380 | 3,006 | |||||||||
Total assets | $ | 794,837 | $ | 721,034 | $ | 563,677 | ||||||
Liabilities and beneficiaries' equity | ||||||||||||
Liabilities: | ||||||||||||
Mortgage loans payable | $ | 474,349 | $ | 399,627 | $ | 306,824 | ||||||
Accounts payable and accrued expenses | 10,227 | 6,597 | 3,395 | |||||||||
Rents received in advance and security deposits | 3,883 | 3,776 | 2,789 | |||||||||
Dividends/distributions payable | 7,090 | 6,298 | 4,692 | |||||||||
Total liabilities | 495,549 | 416,298 | 317,700 | |||||||||
Minority interests: | ||||||||||||
Preferred Units in the Operating Partnership | 24,367 | 24,367 | 52,500 | |||||||||
Common Units in the Operating Partnership | 81,069 | 88,170 | 24,696 | |||||||||
Other consolidated partnership | 124 | 98 | — | |||||||||
Total minority interests | 105,560 | 112,635 | 77,196 | |||||||||
Commitments and contingencies | — | — | — | |||||||||
Beneficiaries' equity: | ||||||||||||
Preferred Shares ($0.01 par value; 5,000,000 authorized); | ||||||||||||
1,025,000 designated as Series A Convertible Preferred Shares of beneficial interest (1 share issued as of December 31, 2000) | — | 10 | 10 | |||||||||
1,725,000 designated as Series B Cumulative Redeemable Preferred Shares of beneficial interest (1,250,000 shares issued as of December 31, 2000) | 12 | 12 | — | |||||||||
Common Shares of beneficial interest ($0.01 par value; 45,000,000 authorized, 20,575,936 shares issued as of December 31, 2000) | 206 | 176 | 168 | |||||||||
Treasury Shares, at cost (166,600 shares as of December 31, 2000) | (1,415 | ) | — | |||||||||
Additional paid-in capital | 209,388 | 202,867 | 175,802 | |||||||||
Accumulated deficit | (11,064 | ) | (7,547 | ) | (7,199 | ) | ||||||
Value of unearned restricted Common Share grants | (3,399 | ) | (3,417 | ) | — | |||||||
Total beneficiaries' equity | 193,728 | 192,101 | 168,781 | |||||||||
Total beneficiaries' equity and minority interests | 299,288 | 304,736 | 245,977 | |||||||||
Total liabilities and beneficiaries' equity | $ | 794,837 | $ | 721,034 | $ | 563,677 | ||||||
Note: Other unconsolidated entities include Corporate Office Services, Inc. (COS); Corporate Office Management, Inc. (COMI); Corporate Development Services, LLC (CDS); MediTract, LLC; Corporate Management Services, LLC (CMS); Corporate Realty Management, LLC (CRM); and Martin G. Knott and Associates, LLC.
10
Annual Consolidated Statements of Operations and Funds From Operations (FFO)
(Amounts in thousands)
| December 31 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2000 | 1999 | 1998 | |||||||||
Revenues | ||||||||||||
Rental income | $ | 93,309 | $ | 70,101 | $ | 35,676 | ||||||
Tenant recoveries and other income | 15,684 | 11,011 | 4,538 | |||||||||
Total Revenues | 108,993 | 81,112 | 40,214 | |||||||||
Expenses | ||||||||||||
Property operating | 12,748 | 9,457 | 5,547 | |||||||||
Repairs and maintenance | 13,013 | 9,042 | 2,730 | |||||||||
Real estate taxes | 5,474 | 3,826 | 1,355 | |||||||||
Total Property Expenses | 31,235 | 22,325 | 9,632 | |||||||||
Net Operating Income | 77,758 | 58,787 | 30,582 | |||||||||
General and administrative | (4,867 | ) | (3,204 | ) | (1,890 | ) | ||||||
Equity in income (loss) of unconsolidated entities | (310 | ) | 198 | 139 | ||||||||
EBITDA | 72,581 | 55,781 | 28,831 | |||||||||
Interest expense | (30,454 | ) | (21,808 | ) | (12,207 | ) | ||||||
Series B Preferred Share dividends | (3,125 | ) | (1,501 | ) | — | |||||||
Amortization of financing costs | (1,382 | ) | (975 | ) | (423 | ) | ||||||
Depreciation on unconsolidated real estate entities | (13 | ) | (6 | ) | — | |||||||
Minority interestholders' share of operations | (26 | ) | (8 | ) | — | |||||||
Depreciation of corporate FF&E | (77 | ) | (82 | ) | (47 | ) | ||||||
Funds From Operation (FFO)—Diluted | 37,504 | 31,401 | 16,154 | |||||||||
Depreciation and other amortization | (16,900 | ) | (11,993 | ) | (6,238 | ) | ||||||
Reformation costs | — | — | (637 | ) | ||||||||
Gain on property sales | 107 | 1,140 | — | |||||||||
Loss on early extinguishment of debt | (153 | ) | (903 | ) | — | |||||||
Depreciation on unconsolidated real estate entities | 13 | — | — | |||||||||
Minority interestholders' share of operations | 26 | 14 | — | |||||||||
Series B Preferred Share dividends | 3,125 | 1,501 | — | |||||||||
Income Before Minority Interests and Preferred Share dividends | 23,722 | 21,160 | 9,279 | |||||||||
Minority Interests: | ||||||||||||
Preferred Units in operating partnership | (2,240 | ) | (2,620 | ) | (3,412 | ) | ||||||
Common Units in operating partnership | (6,322 | ) | (3,449 | ) | (1,171 | ) | ||||||
Other consolidated partnership | (26 | ) | (8 | ) | — | |||||||
Preferred Share dividends | (3,802 | ) | (2,854 | ) | (327 | ) | ||||||
Net Income Available to Common Shareholders | $ | 11,332 | $ | 12,229 | $ | 4,369 | ||||||
Funds From Operation (FFO)—Diluted | $ | 37,504 | $ | 31,401 | $ | 16,154 | ||||||
Straight line rents | (4,107 | ) | (2,766 | ) | (1,785 | ) | ||||||
Non-incremental capital expenditures | (2,843 | ) | (2,579 | ) | (538 | ) | ||||||
Adjusted Funds from Operations | $ | 30,554 | $ | 26,056 | $ | 13,831 | ||||||
Preferred dividends/distributions | 6,042 | 5,474 | 3,739 | |||||||||
Common dividends/distributions | 22,204 | 16,220 | 8,317 | |||||||||
Total Dividends/Distributions | $ | 28,246 | $ | 21,694 | $ | 12,056 | ||||||
Weighted average outstanding shares/units | 32,154 | 29,372 | 19,686 | |||||||||
11
Annual Consolidated Statements of Operations and FFO per Diluted Share
(Shares in thousands)
| December 31 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2000 | 1999 | 1998 | |||||||||
Revenues | ||||||||||||
Rental income | $ | 2.90 | $ | 2.39 | $ | 1.81 | ||||||
Tenant recoveries and other income | 0.49 | 0.37 | 0.23 | |||||||||
Total Revenues | 3.39 | 2.76 | 2.04 | |||||||||
Expenses | ||||||||||||
Property operating | 0.40 | 0.32 | 0.28 | |||||||||
Repairs and maintenance | 0.40 | 0.31 | 0.14 | |||||||||
Real estate taxes | 0.17 | 0.13 | 0.07 | |||||||||
Total Property Expenses | 0.97 | 0.76 | 0.49 | |||||||||
Net Operating Income | 2.42 | 2.00 | 1.55 | |||||||||
General and administrative | (0.15 | ) | (0.11 | ) | (0.10 | ) | ||||||
Equity in income (loss) of unconsolidated entities | (0.01 | ) | 0.01 | 0.01 | ||||||||
EBITDA | 2.26 | 1.90 | 1.46 | |||||||||
Interest expense | (0.95 | ) | (0.74 | ) | (0.62 | ) | ||||||
Series B Preferred Share dividends | (0.10 | ) | (0.05 | ) | — | |||||||
Amortization of deferred financing costs | (0.04 | ) | (0.03 | ) | (0.02 | ) | ||||||
Depreciation on unconsolidated real estate entities | (0.00 | ) | — | — | ||||||||
Minority interestholders' share of operations | (0.00 | ) | (0.00 | ) | — | |||||||
Depreciation of corporate FF&E | (0.00 | ) | (0.00 | ) | (0.00 | ) | ||||||
Funds From Operation (FFO)—Diluted | 1.17 | 1.07 | 0.82 | |||||||||
Depreciation and other amortization | (0.53 | ) | (0.41 | ) | (0.32 | ) | ||||||
Reformation costs | — | — | (0.03 | ) | ||||||||
Gain on property sales | 0.00 | 0.04 | — | |||||||||
Loss on early extinguishment of debt | (0.00 | ) | (0.03 | ) | — | |||||||
Depreciation on unconsolidated real estate entities | 0.00 | — | — | |||||||||
Minority interestholders' share of operations | 0.00 | 0.00 | — | |||||||||
Series B Preferred Share dividends | 0.10 | 0.05 | — | |||||||||
Income Before Minority Interests and Preferred Share dividends | 0.74 | 0.72 | 0.47 | |||||||||
Minority Interests: | ||||||||||||
Preferred Units in operating partnership | (0.07 | ) | (0.09 | ) | (0.17 | ) | ||||||
Common Units in operating partnership | (0.20 | ) | (0.12 | ) | (0.06 | ) | ||||||
Other consolidated partnership | (0.00 | ) | (0.00 | ) | — | |||||||
Preferred Share dividends | (0.12 | ) | (0.10 | ) | (0.02 | ) | ||||||
Net Income Available to Common Shareholders | $ | 0.35 | $ | 0.42 | $ | 0.22 | ||||||
Funds From Operation (FFO)—Diluted | $ | 1.17 | $ | 1.07 | $ | 0.82 | ||||||
Straight line rents | (0.13 | ) | (0.09 | ) | (0.09 | ) | ||||||
Non-incremental capital expenditures | (0.09 | ) | (0.09 | ) | (0.03 | ) | ||||||
Adjusted Funds from Operations | $ | 0.95 | $ | 0.89 | $ | 0.70 | ||||||
Weighted Average Diluted Shares Outstanding | 32,154 | 29,372 | 19,686 | |||||||||
12
Annual Consolidated Statements of Operations and FFO as a
Percentage of Total Revenues
| December 31 | ||||||||
---|---|---|---|---|---|---|---|---|---|
| 2000 | 1999 | 1998 | ||||||
Revenues | |||||||||
Rental income | 86% | 86% | 89% | ||||||
Tenant recoveries and other income | 14% | 14% | 11% | ||||||
Total Revenues | 100% | 100% | 100% | ||||||
Expenses | |||||||||
Property operating | 12% | 12% | 14% | ||||||
Repairs and maintenance | 12% | 11% | 7% | ||||||
Real estate taxes | 5% | 5% | 3% | ||||||
Total Property Expenses | 29% | 28% | 24% | ||||||
Net Operating Income | 71% | 72% | 76% | ||||||
General and administrative | (4% | ) | (4% | ) | (5% | ) | |||
Equity in income (loss) of unconsolidated entities | (0% | ) | 0% | 0% | |||||
EBITDA | 67% | 69% | 72% | ||||||
Interest expense | (28% | ) | (27% | ) | (30% | ) | |||
Series B Preferred Share dividends | (3% | ) | (2% | ) | 0% | ||||
Amortization of deferred financing costs | (1% | ) | (1% | ) | (1% | ) | |||
Depreciation on unconsolidated real estate entities | (0% | ) | 0% | 0% | |||||
Minority interestholders' share of operations | (0% | ) | (0% | ) | 0% | ||||
Depreciation of corporate FF&E | (0% | ) | (0% | ) | (0% | ) | |||
Funds From Operation (FFO)—Diluted | 34% | 39% | 40% | ||||||
Depreciation and other amortization | (16% | ) | (15% | ) | (16% | ) | |||
Reformation costs | 0% | 0% | (2% | ) | |||||
Gain on property sales | 0% | 1% | 0% | ||||||
Loss on early extinguishment of debt | (0% | ) | (1% | ) | 0% | ||||
Depreciation on unconsolidated real estate entities | 0% | 0% | 0% | ||||||
Minority interestholders' share of operations | 0% | 0% | 0% | ||||||
Series B Preferred Share dividends | 3% | 2% | 0% | ||||||
Income Before Minority Interests and Preferred Share dividends | 22% | 26% | 23% | ||||||
Minority Interests: | |||||||||
Preferred Units in operating partnership | (2% | ) | (3% | ) | (8% | ) | |||
Common Units in operating partnership | (6% | ) | (4% | ) | (3% | ) | |||
Other consolidated partnership | (0% | ) | (0% | ) | 0% | ||||
Preferred Share dividends | (3% | ) | (4% | ) | (1% | ) | |||
Net Income Available to Common Shareholders | 10% | 15% | 11% | ||||||
Funds From Operation (FFO)—Diluted | 34% | 39% | 40% | ||||||
Straight line rents | (4% | ) | (3% | ) | (4% | ) | |||
Non-incremental capital expenditures | (3% | ) | (3% | ) | (1% | ) | |||
Adjusted Funds from Operations | 28% | 32% | 34% | ||||||
Preferred dividends/distributions | 6% | 7% | 9% | ||||||
Common dividends/distributions | 20% | 20% | 21% | ||||||
Total Dividends/Distributions | 26% | 27% | 30% | ||||||
13
Quarterly Equity Analysis
(Amounts in thousands, except per share data, share prices and ratios)
| 2000 | 1999 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||||||
Common Equity—End of Quarter | |||||||||||||||||
Common Shares(1) | 20,409 | 20,407 | 18,544 | 18,529 | 17,646 | ||||||||||||
Common Units | 9,388 | 9,388 | 9,388 | 9,558 | 10,435 | ||||||||||||
Total | 29,797 | 29,795 | 27,932 | 28,087 | 28,081 | ||||||||||||
Convertible Preferred Equity—End of Quarter | |||||||||||||||||
Convertible Series A Preferred Shares Outstanding(2) | 0 | 0 | 984 | 984 | 984 | ||||||||||||
Conversion Ratio | 1.8748 | 1.8748 | 1.8748 | 1.8748 | 1.8748 | ||||||||||||
Common Shares Issued Assuming Conversion | 0 | 0 | 1,845 | 1,845 | 1,845 | ||||||||||||
Preferred Share Book Value | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | |||||||
Convertible Series C Preferred Units Outstanding(3) | 1,017 | 1,017 | 975 | 975 | 975 | ||||||||||||
Conversion Ratio | 2.3810 | 2.3810 | 2.3810 | 2.3810 | 2.3810 | ||||||||||||
Common Units Issued Assuming Conversion | 2,421 | 2,421 | 2,321 | 2,321 | 2,321 | ||||||||||||
Preferred Units Book Value per Unit | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | |||||||
Perpetual Preferred Equity—End of Quarter | |||||||||||||||||
Redeemable Series B Shares Outstanding | 1,250 | 1,250 | 1,250 | 1,250 | 1,250 | ||||||||||||
Preferred Share Book Value | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | |||||||
Weighted Average Shares: | |||||||||||||||||
Weighted Average Common Shares Outstanding | 19,947 | 19,934 | 18,014 | 17,353 | 17,176 | ||||||||||||
Weighted Average Preferred Shares Outstanding Assuming Conversion | 0 | — | 1,845 | 1,845 | 1,845 | ||||||||||||
Weighted Average Dilutive Options | 276 | 239 | 180 | 50 | 10 | ||||||||||||
Weighted Average Dilutive Warrants(3) | — | — | 476 | 476 | — | ||||||||||||
Weighted Average Common Units | 9,388 | 9,388 | 9,556 | 10,281 | 10,435 | ||||||||||||
Weighted Average Preferred Units Assuming Conversion | 2,421 | 2,421 | 2,321 | 2,321 | 277 | ||||||||||||
Weighted Avg. Shares/Units Outstanding Assuming Conversion of Preferred Shares/Units | 32,032 | 31,982 | 32,393 | 32,325 | 29,743 | ||||||||||||
Common Shares Trading Volume | |||||||||||||||||
Average Daily Volume (Shares) | 13 | 20 | 22 | 19 | 23 | ||||||||||||
Average Daily Volume (Dollars in thousands) | $ | 122.20 | $ | 188.38 | $ | 187.74 | $ | 152.05 | $ | 174.37 | |||||||
As a Percentage of Common Shares | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | |||||||
Common Share Price Range | |||||||||||||||||
Quarterly High | $ | 10.00 | $ | 10.13 | $ | 9.25 | $ | 8.38 | $ | 8.25 | |||||||
Quarterly Low | $ | 8.94 | $ | 8.75 | $ | 8.00 | $ | 7.50 | $ | 7.06 | |||||||
Quarterly Average | $ | 9.63 | $ | 9.39 | $ | 8.72 | $ | 7.92 | $ | 7.70 | |||||||
End of Quarter | $ | 9.94 | $ | 9.94 | $ | 9.19 | $ | 8.19 | $ | 7.63 | |||||||
Capitalization | |||||||||||||||||
Liquidation Value of Preferred Shares/Units | $ | 56,667 | $ | 56,667 | $ | 80,224 | $ | 80,224 | $ | 80,224 | |||||||
Market Value of Common Shares/Units | 296,106 | 296,088 | 256,625 | 229,962 | 214,118 | ||||||||||||
Total Equity Market Capitalization | $ | 352,773 | $ | 352,754 | $ | 336,850 | $ | 310,187 | $ | 294,342 | |||||||
Total Debt | $ | 474,349 | $ | 465,696 | $ | 436,679 | $ | 412,191 | $ | 399,627 | |||||||
Total Market Capitalization | $ | 827,122 | $ | 818,450 | $ | 773,529 | $ | 722,378 | $ | 693,969 | |||||||
Debt to Total Market Capitalization | 57.3% | 56.9% | 56.5% | 57.1% | 57.6% | ||||||||||||
Debt to Undepreciated Book Value of Real Estate Assets | 60.4% | 59.9% | 57.9% | 56.4% | 55.9% |
- (1)
- Net of 166,600 treasury shares as of December 31, 2000.
- (2)
- Converted September 28, 2000 except for 1 Convertible Series A preferred share.
- (3)
- Eliminated a warrant to acquire a maximum of 476,200 common units in exchange for the issuance of 42,000 Series C convertible preferred units in July 2000.
14
Quarterly Valuation Analysis
(Dollars in thousands except per share data and ratios)
| 2000 | 1999 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||||
PRICING MULTIPLES | ||||||||||||||||
NOI Multiple | ||||||||||||||||
(Market value of Common Equity + Avg. Preferred Share/Units+ Avg. Total Debt) / Ann. NOI | 9.61x | 10.05x | 10.10x | 9.80x | 10.16x | |||||||||||
EBITDA Multiple | ||||||||||||||||
(Market value of Common Equity + Avg. Preferred Share/Units + Avg. Total Debt) / Ann. EBITDA | 10.22x | 10.83x | 10.79x | 10.55x | 10.80x | |||||||||||
FFO Multiple | ||||||||||||||||
(Quarter End Common Share Price / Ann. FFO—diluted) | 8.12x | 8.32x | 8.04x | 7.43x | 6.88x | |||||||||||
AFFO Multiple | ||||||||||||||||
(Quarter End Common Share Price / Ann. AFFO—diluted) | 9.67x | 10.98x | 9.75x | 8.91x | 8.32x | |||||||||||
NOI Yield | ||||||||||||||||
(Ann. NOI / (Market value of Common Equity + Avg. Preferred Share/Units + Avg. Debt)) | 10.41% | 9.95% | 9.90% | 10.21% | 9.85% | |||||||||||
EBITDA Yield | ||||||||||||||||
(Ann. EBITDA / (Market value of Common Equity + Avg. Preferred Share/Units + Avg. Debt)) | 9.78% | 9.24% | 9.27% | 9.48% | 9.25% | |||||||||||
FFO Yield | ||||||||||||||||
(Ann. FFO / Quarter End Common Share Price) | 12.32% | 12.02% | 12.43% | 13.45% | 14.53% | |||||||||||
AFFO Yield | ||||||||||||||||
(Ann. AFFO / Quarter End Common Share Price) | 10.34% | 9.11% | 10.26% | 11.23% | 12.03% | |||||||||||
Total Market Capitalization Per Square Foot | ||||||||||||||||
((Market Value of Common Stock + Preferred Share/Units + Total Debt ) / GLA)(1) | $ | 127.79 | $ | 128.86 | $ | 121.76 | $ | 118.79 | $ | 114.21 | ||||||
RETURNS | ||||||||||||||||
Yield on Real Estate Owned—NOI | ||||||||||||||||
(Ann. NOI / Avg. Adjusted Gross Real Estate Investment)(2) | 11.15% | 11.06% | 10.80% | 10.66% | 10.41% | |||||||||||
Yield on Real Estate Owned—EBITDA | ||||||||||||||||
(Ann. EBITDA / Avg. Adjusted Gross Real Estate Investment)(2) | 10.48% | 10.27% | 10.11% | 9.90% | 9.78% | |||||||||||
Return on Book Value of Average Equity & Minority Interest | ||||||||||||||||
(Ann. EBTDA / Avg. Equity & Minority Interest) | 14.72% | 14.24% | 13.71% | 13.17% | 12.74% |
- (1)
- Excludes square footage of assets under development or under construction.
- (2)
- Excludes land-development, construction in progress and investment in real estate joint ventures as these assets are not yet income generating.
15
Quarterly Debt Analysis
(Dollars in thousands)
| 2000 | 1999 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||||||
Debt Outstanding | |||||||||||||||||
Mortgage Loans | $ | 329,955 | $ | 338,063 | $ | 313,325 | $ | 319,624 | $ | 317,392 | |||||||
Construction Loans | 33,058 | 25,586 | 38,669 | 29,067 | 24,735 | ||||||||||||
Revolving Credit Facility | 29,091 | 4,761 | — | — | — | ||||||||||||
Secured Revolving Credit Facility | 82,245 | 97,285 | 84,685 | 63,500 | 57,500 | ||||||||||||
$ | 474,349 | $ | 465,695 | $ | 436,679 | $ | 412,191 | $ | 399,627 | ||||||||
Average Outstanding Balance | |||||||||||||||||
Mortgage Loans | $ | 325,971 | $ | 319,745 | $ | 318,249 | $ | 317,436 | $ | 288,515 | |||||||
Construction Loans | 28,277 | 37,700 | 34,145 | 26,551 | 18,825 | ||||||||||||
Revolving Credit Facility | 22,545 | 2,381 | — | — | — | ||||||||||||
Secured Revolving Credit Facility | 90,910 | 91,239 | 77,794 | 61,199 | 54,048 | ||||||||||||
$ | 467,703 | $ | 451,065 | $ | 430,188 | $ | 405,186 | $ | 361,388 | ||||||||
Interest Rate Structure | |||||||||||||||||
Fixed | $ | 201,715 | $ | 305,614 | $ | 277,575 | $ | 283,624 | $ | 281,253 | |||||||
Variable | 147,634 | 60,081 | 109,104 | 128,567 | 118,374 | ||||||||||||
Variable Subject to Interest Rate Protection(1-3) | 125,000 | 100,000 | 50,000 | — | — | ||||||||||||
$ | 474,349 | $ | 465,695 | $ | 436,679 | $ | 412,191 | $ | 399,627 | ||||||||
% of Fixed Rate Loans(A) | 42.52% | 65.63% | 63.56% | 68.81% | 70.38% | ||||||||||||
% of Variable Rate Loans | 57.48% | 34.37% | 36.44% | 31.19% | 29.62% | ||||||||||||
100.00% | 100.00% | 100.00% | 100.00% | 100.00% | |||||||||||||
(A) Excludes interest rate protection agreements. | |||||||||||||||||
Average Interests Rates | |||||||||||||||||
Mortgage & Construction Loans | 7.84% | 7.62% | 7.52% | 7.53% | 7.45% | ||||||||||||
Revolving Credit Facility | 8.17% | 8.12% | n/a | n/a | n/a | ||||||||||||
Secured Revolving Credit Facility | 8.38% | 8.33% | 8.11% | 7.68% | 7.61% | ||||||||||||
Total Weighted Average | 7.96% | 7.64% | 7.58% | 7.55% | 7.48% | ||||||||||||
Debt Ratios | |||||||||||||||||
Debt to Total Market Capitalization | 57.3% | 56.9% | 56.5% | 57.1% | 57.6% | ||||||||||||
Debt to Undepreciated Book Value of Real Estate Assets | 60.4% | 59.9% | 57.9% | 56.4% | 55.9% | ||||||||||||
Coverage Ratios (excluding capitalized interest) | |||||||||||||||||
Interest Coverage—NOI | 2.48x | 2.55x | 2.56x | 2.63x | 2.61x | ||||||||||||
(NOI / Interest) | |||||||||||||||||
Interest Coverage—EBITDA | 2.33x | 2.36x | 2.40x | 2.44x | 2.46x | ||||||||||||
(EBITDA / Interest) | |||||||||||||||||
Interest Coverage—EBITDA—YTD | 2.38x | 2.40x | 2.42x | 2.44x | 2.56x | ||||||||||||
(EBITDA / Interest—Year-to-date) | |||||||||||||||||
Debt Service Coverage—NOI | 2.20x | 2.28x | 2.32x | 2.35x | 2.32x | ||||||||||||
(NOI / (Interest + Principal Amortization)) | |||||||||||||||||
Debt Service Coverage—EBITDA | 2.07x | 2.11x | 2.17x | 2.18x | 2.18x | ||||||||||||
(EBITDA / (Interest + Principal Amortization)) | |||||||||||||||||
Fixed Charge Coverage—NOI | 2.13x | 2.17x | 2.09x | 2.12x | 2.20x | ||||||||||||
(NOI / (Interest + Preferred Distribution)) | |||||||||||||||||
Fixed Charge Coverage—EBITDA | 2.01x | 2.02x | 1.96x | 1.97x | 2.08x | ||||||||||||
(EBITDA / (Interest + Preferred Distribution)) |
- (1)
- We purchased a $50 million 2-year cap on LIBOR at a rate of 7.7% which expires May 31, 2002.
- (2)
- We purchased a $50 million 1-year cap on LIBOR at a rate of 7.0% which expires October 13, 2001.
- (3)
- We purchased a $25 million 1-year cap on LIBOR at a rate of 7.0% which expires October 13, 2001.
Effective in January 2001, we executed a $100 million notional amount swap exchanging 30-day floating LIBOR for LIBOR of 5.76% over a two-year period.
16
Quarterly Operating Ratios
(Dollars in thousands except per share data and ratios)
| 2000 | 1999 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||||
OPERATING RATIOS | ||||||||||||||||
NOI as a % of Real Estate Revenues | ||||||||||||||||
(NOI / (Rental Revenue + Oper. Expense Reimb.)) | 71.61% | 71.29% | 71.85% | 70.58% | 73.94% | |||||||||||
EBITDA as a % of Real Estate Revenues | ||||||||||||||||
(EBITDA / (Rental Revenue + Oper. Expense Reimb.)) | 67.30% | 66.19% | 67.27% | 65.55% | 69.64% | |||||||||||
G&A as a % of Real Estate Revenues | ||||||||||||||||
(G&A / (Rental Revenue + Oper. Expense Reimb.)) | 3.63% | 4.70% | 4.39% | 5.21% | 3.93% | |||||||||||
G&A as a % of EBITDA | ||||||||||||||||
(G&A / EBITDA) | 5.39% | 7.11% | 6.53% | 7.95% | 5.65% | |||||||||||
Quarter end occupancy for entire portfolio | 97.03% | 97.33% | 96.66% | 97.26% | 97.46% | |||||||||||
Quarter end % leased for office portfolio | 98.17% | 98.30% | 98.40% | 98.00% | 98.50% | |||||||||||
Non-Incremental Capital Expenditures | $ | 776 | $ | 415 | $ | 923 | $ | 729 | $ | 790 | ||||||
Non-Incremental Capital Expenditures per average square feet | $ | 0.12 | $ | 0.07 | $ | 0.15 | $ | 0.12 | $ | 0.14 | ||||||
Non-Incremental Capital Expenditures per Diluted Share | $ | 0.02 | $ | 0.01 | $ | 0.03 | $ | 0.02 | $ | 0.03 | ||||||
Non-Incremental Capital Expenditures as a % of NOI | 3.78% | 2.08% | 4.86% | 3.99% | 4.73% |
17
| 2000 | 1999 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||||
Common Share Dividends | ||||||||||||||||
Dividends per share/unit | $ | 0.20 | $ | 0.20 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||
Increase over prior quarter | 0.0% | 5.3% | 0.0% | 0.0% | 0.0% | |||||||||||
Increase over prior year | 5.3% | 5.3% | 5.6% | 5.6% | 5.6% | |||||||||||
Common Dividend Payout Ratios | ||||||||||||||||
Payout—FFO—Diluted | 65.7% | 67.4% | 66.0% | 69.0% | 68.5% | |||||||||||
((Dividend + Distributions)/FFO) | ||||||||||||||||
Payout—AFFO—Diluted | 78.3% | 87.7% | 80.0% | 82.6% | 82.8% | |||||||||||
(Dividend/FAD) | ||||||||||||||||
Dividend Coverage—FFO—Diluted | 1.52x | 1.48x | 1.51x | 1.45x | 1.46x | |||||||||||
(FFO/dividends) | ||||||||||||||||
Dividend Coverage—AFFO—Diluted | 1.28x | 1.14x | 1.25x | 1.21x | 1.21x | |||||||||||
(AFFO/dividends) | ||||||||||||||||
Common Dividend Yields | ||||||||||||||||
Dividend Yield | 8.05% | 8.05% | 8.27% | 9.28% | 9.97% | |||||||||||
Series C Preferred Unit Distributions | ||||||||||||||||
Preferred Unit Distributions Per Share(1) | $ | 0.5625 | $ | 0.5625 | $ | 0.5625 | $ | 0.5625 | $ | 0.0625 | ||||||
Preferred Unit Distributions Yield | 9.00% | 9.00% | 9.00% | 9.00% | 9.00% | |||||||||||
Quarter End Book Value | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | ||||||
Series A Preferred Share Dividends | ||||||||||||||||
Preferred Share Dividends Per Share | $ | 0.34375 | $ | 0.34375 | $ | 0.34375 | $ | 0.34375 | $ | 0.34375 | ||||||
Preferred Share Dividend Yield | 5.50% | 5.50% | 5.50% | 5.50% | 5.50% | |||||||||||
Quarter End Book Value | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | ||||||
Series B Preferred Share Dividends | ||||||||||||||||
Preferred Share Dividends Per Share | $ | 0.6250 | $ | 0.6250 | $ | 0.6250 | $ | 0.6250 | $ | 0.6250 | ||||||
Preferred Share Dividend Yield | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |||||||||||
Quarter End Book Value | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 |
- (1)
- Series C Preferred Unit distributions prorated for actual number of days outstanding in the quarter ended December 31, 1999.
18
Investor Composition and Analyst Coverage
(as of December 31, 2000)
SHAREHOLDER CLASSIFICATION | Common Shares | Common Units | As if Converted Preferred Shares / Units | Total | Fully Diluted Ownership % of Total | |||||
---|---|---|---|---|---|---|---|---|---|---|
Constellation Real Estate, Inc. | 8,876,171 | — | 2 | 8,876,173 | 27.55% | |||||
Insiders | 1,138,409 | 7,837,937 | — | 8,976,346 | 27.86% | |||||
Institutional Ownership | 3,822,330 | — | — | 3,822,330 | 11.86% | |||||
Other / Retail | 6,572,426 | 1,549,599 | 2,420,672 | 10,542,697 | 32.72% | |||||
20,409,336 | 9,387,536 | 2,420,674 | 32,217,546 | 100.00% | ||||||
RESEARCH COVERAGE | December 31, 2000 | September 30, 2000 | June 30, 2000 | March 31, 2000 | December 31, 1999 | |||||
---|---|---|---|---|---|---|---|---|---|---|
A. G. Edwards | x | x | ||||||||
Deutsche Banc Alex. Brown | x | x | x | |||||||
Credit Suisse First Boston | x | x | x | x | x | |||||
CIBC Oppenheimer | x | |||||||||
Janney Montgomery Scott | x | x | x | x | x | |||||
Tucker Anthony Cleary Gull | x | x | x | |||||||
Johnston, Lemon | x | x | x | |||||||
Legg Mason Wood Walker, Inc. | x | x | x | x | x | |||||
Prudential Securities Incorporated | x | x | x | x | ||||||
McDonald Investments | x | x | x | x |
Source: Institutional ownership was obtained from filed Forms 13(f) as of September 30, 2000 per Vickers Stock Research Corporation.
19
Debt Maturity Schedule December 31, 2000
(Dollars in thousands)
| Mortgages | | | | | | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year of Maturity | Monthly Amortization | Due on Maturity | Construction(1) Loans | Term Credit(2) Facility | $100,000 Secured Revolving Credit Facility | $50,000 Revolving Credit Facility | Total Scheduled Payments | ||||||||||||||
2001 | 3,702 | 7,000 | 2,192 | — | 82,245 | 29,091 | 124,230 | ||||||||||||||
2002 | 3,820 | 11,592 | 15,542 | 100,000 | — | — | 130,954 | ||||||||||||||
2003 | 4,020 | 4,308 | 16,082 | — | — | — | 24,410 | ||||||||||||||
2004 | 4,008 | 25,762 | — | — | — | — | 29,770 | ||||||||||||||
2005 | 3,876 | 20,174 | — | — | — | — | 24,050 | ||||||||||||||
2006 | 3,533 | 59,975 | — | — | — | — | 63,508 | ||||||||||||||
2007 | 2,378 | 6,142 | — | — | — | — | 8,520 | ||||||||||||||
2008 | 2,047 | 66,860 | — | — | — | — | 68,907 | ||||||||||||||
$ | 27,384 | $ | 201,813 | $ | 33,816 | $ | 100,000 | $ | 82,245 | $ | 29,091 | $ | 474,349 | ||||||||
Notes:
- (1)
- We have the right to extend a $9,019 construction loan for a one-year period, subject to certain conditions, upon maturity in 2001. The above table includes this maturity of $8,727 in 2002. We also have the right to extend two construction loans of $9,978 and $1,626 each for a one-year period, subject to certain conditions, upon maturity in 2002. The above table includes $11,278 in 2003 as a maturity for these two loans. Finally, a $4,843 construction loan contains a two-year extension period. A maturity of $4,702 in Year 2003 has been presented in the above table, as if extended. The remaining loans mature as follows: $6,350 in May 2002 and $2,000 in September 2001 (assuming the three-month extension is exercised). The loan balances as of December 31 represent the outstanding balance as of that date.
- (2)
- The Term Credit Facility was extended through October 13, 2001. We have the right to extend for another one-year period, subject to certain conditions. Effective on October 14, 2000, the interest rate converted to LIBOR plus 175. This loan has been presented as maturing in October 2002 in the above table.
We have obtained interest rate protection agreements as follows:
$50 million cap on thirty-day LIBOR at 7.7% expiring in May 2002.
$50 million cap on thirty-day LIBOR at 7.0% expiring in October 2001.
$25 million cap on thirty-day LIBOR at 7.0% expiring in October 2001.
Effective in January 2001, $100 million notional amount swap of thirty-day LIBOR at 5.76% expiring in January 2003.
20
Property Summary by Region — December 31, 2000
| Submarket | State | Year Built or Renovated | Single Story (S) or Multi- story (M) | Rentable Square Feet | Anticipated Rentable Square Feet Development | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Office Properties | ||||||||||||
Baltimore /Washington Corridor | ||||||||||||
131 National Business Parkway | BWI Airport | MD | 1990 | M | 68,906 | |||||||
132 National Business Parkway | BWI Airport | MD | 2000 | M | 118,456 | |||||||
133 National Business Parkway | BWI Airport | MD | 1997 | M | 88,666 | |||||||
134 National Business Parkway | BWI Airport | MD | 1999 | M | 93,482 | |||||||
135 National Business Parkway | BWI Airport | MD | 1998 | M | 86,863 | |||||||
141 National Business Parkway | BWI Airport | MD | 1990 | M | 86,964 | |||||||
2721 Phoenix Road (221 NBP) | BWI Airport | MD | 2000 | M | 117,890 | |||||||
2701 Phoenix Road (201 NBP)(1) | BWI Airport | MD | M | 118,000 | ||||||||
2711 Phoenix Road (211 NBP)(1) | BWI Airport | MD | M | 150,000 | ||||||||
1099 Winterson Road | BWI Airport | MD | 1988 | M | 70,569 | |||||||
1190 Winterson Road | BWI Airport | MD | 1987 | M | 68,567 | |||||||
1199 Winterson Road | BWI Airport | MD | 1988 | M | 96,636 | |||||||
1201 Winterson Road | BWI Airport | MD | 1985 | M | 67,903 | |||||||
1331 Ashton Road | BWI Airport | MD | 1989 | S | 29,936 | |||||||
1334 Ashton Road | BWI Airport | MD | 1989 | S | 37,565 | |||||||
1340 Ashton Road | BWI Airport | MD | 1989 | S | 46,400 | |||||||
1341 Ashton Road | BWI Airport | MD | 1989 | S | 15,841 | |||||||
1343 Ashton Road | BWI Airport | MD | 1989 | S | 9,962 | |||||||
1344 Ashton Road | BWI Airport | MD | 1989 | M | 16,865 | |||||||
1350 Dorsey Road | BWI Airport | MD | 1989 | S | 19,992 | |||||||
2730 Hercules Road | BWI Airport | MD | 1990 | M | 240,336 | |||||||
7240 Parkway Drive | BWI Airport | MD | 1985 | M | 73,500 | |||||||
7318 Parkway Drive | BWI Airport | MD | 1984 | S | 59,204 | |||||||
7321 Parkway Drive | BWI Airport | MD | 1984 | S | 39,822 | |||||||
7467 Ridge Road | BWI Airport | MD | 1990 | M | 73,756 | |||||||
800 International Drive | BWI Airport | MD | 1988 | S | 50,979 | |||||||
849 International Drive | BWI Airport | MD | 1988 | M | 68,186 | |||||||
881 Elkridge Landing Road | BWI Airport | MD | 1986 | M | 73,572 | |||||||
900 Elkridge Landing Road | BWI Airport | MD | 1982 | M | 97,139 | |||||||
900 International Drive | BWI Airport | MD | 1986 | S | 57,140 | |||||||
911 Elkridge Landing Road | BWI Airport | MD | 1985 | M | 68,297 | |||||||
921 Elkridge Landing Road | BWI Airport | MD | 1983 | M | 54,057 | |||||||
930 International Drive | BWI Airport | MD | 1986 | S | 57,140 | |||||||
939 Elkridge Landing Road | BWI Airport | MD | 1983 | M | 51,953 | |||||||
999 Corporate Boulevard | BWI Airport | MD | 2000 | M | 67,351 | |||||||
1302 Concourse Drive | BWI Airport | MD | 1996 | M | 84,607 | |||||||
1304 Concourse Drive | BWI Airport | MD | M | 100,000 | ||||||||
1306 Concourse Drive | BWI Airport | MD | 1990 | M | 113,837 | |||||||
1615 and 1629 Thames Street | Baltimore City | MD | 1989 | M | 103,683 | |||||||
9690 Deereco Road | North Baltimore County | MD | 1988 | M | 133,702 | |||||||
375 West Padonia Road | North Baltimore County | MD | 1986 | M | 100,804 | |||||||
9140 Route 108 | Howard County Perimeter | MD | 1974/1985 | S | 150,000 | |||||||
6716 Alexander Bell Drive | Howard County Perimeter | MD | 1990 | M | 51,980 | |||||||
6740 Alexander Bell Drive | Howard County Perimeter | MD | 1992 | M | 61,878 | |||||||
6750 Alexander Bell Drive | Howard County Perimeter | MD | M | 78,460 | ||||||||
6760 Alexander Bell Drive | Howard County Perimeter | MD | 1991 | M | 37,248 | |||||||
6940 Columbia Gateway Drive | Howard County Perimeter | MD | 1999 | M | 108,737 | |||||||
6950 Columbia Gateway Drive | Howard County Perimeter | MD | 1998 | M | 107,778 | |||||||
6711 Columbia Gateway Drive | Howard County Perimeter | MD | M | 122,889 | ||||||||
6731 Columbia Gateway Drive | Howard County Perimeter | MD | M | 122,889 | ||||||||
Robert Fulton Drive—Phase I(1) | Howard County Perimeter | MD | M | 144,350 | ||||||||
7200 Riverwood Drive | Howard County Perimeter | MD | 1986 | S | 160,000 | |||||||
8815 Centre Park Drive | Howard County Perimeter | MD | 1987 | M | 53,782 | |||||||
14502 Greenview Drive | Laurel | MD | 1988 | M | 71,873 | |||||||
14504 Greenview Drive | Laurel | MD | 1985 | M | 69,194 | |||||||
6009—6011 Oxon Hill Road | Southern Prince George's County | MD | 1990 | M | 181,768 | |||||||
# of Operating Buildings: | 49 | |||||||||||
Total Baltimore / Washington Corridor: | 3,864,766 | 836,588 | ||||||||||
- (1)
- This property is owned through a joint venture.
21
Property Summary by Region — December 31,200
Office Propreties | Submarket | State | Year Built or Renovated | Single Story (S) or Multi- story (M) | Rentable Square Feet | Anticipated Rentable Square Feet Development | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Greater Philadelphia | ||||||||||||
751 Jolly Road | Blue Bell | PA | 1966/1991 | M | 112,958 | |||||||
753 Jolly Road | Blue Bell | PA | 1960/1992-94 | M | 419,472 | |||||||
760 Jolly Road | Blue Bell | PA | 1974/1994 | M | 208,854 | |||||||
785 Jolly Road | Blue Bell | PA | 1970/1996 | M | 219,065 | |||||||
# of Operating Buildings: | 4 | |||||||||||
Total Greater Philadelphia: | 960,349 | — | ||||||||||
Greater Harrisburg | ||||||||||||
2601 Market Place | East Shore | PA | 1989 | M | 67,753 | |||||||
2605 Interstate Drive | East Shore | PA | 1990 | M | 84,268 | |||||||
6375 Flank Drive | East Shore | PA | 2000 | S | 19,783 | |||||||
6385 Flank Drive | East Shore | PA | 1995 | S | 32,800 | |||||||
75 Shannon Road | East Shore | PA | 1999 | S | 20,887 | |||||||
85 Shannon Road | East Shore | PA | 1999 | S | 12,863 | |||||||
95 Shannon Road | East Shore | PA | 1999 | S | 21,976 | |||||||
6340 Flank Drive | East Shore | PA | 1988 | S | 68,200 | |||||||
6345 Flank Drive | East Shore | PA | 1989 | S | 69,443 | |||||||
6360 Flank Drive | East Shore | PA | 1988 | S | 46,500 | |||||||
6380 Flank Drive | East Shore | PA | 1991 | S | 32,000 | |||||||
6400 Flank Drive | East Shore | PA | 1992 | S | 52,439 | |||||||
6405 Flank Drive | East Shore | PA | 1991 | S | 32,000 | |||||||
5035 Ritter Road | West Shore | PA | 1988 | S | 56,556 | |||||||
5070 Ritter Road—Building A | West Shore | PA | 1989 | S | 32,000 | |||||||
5070 Ritter Road—Building B | West Shore | PA | 1989 | S | 28,000 | |||||||
# of Operating Buildings: | 16 | 677,468 | — | |||||||||
Total Greater Harrisburg: | ||||||||||||
Northern/Central New Jersey | ||||||||||||
101 Interchange Plaza | Exit 8A—Cranbury | NJ | 1985 | M | 43,749 | |||||||
104 Interchange Plaza | Exit 8A—Cranbury | NJ | 1990 | M | 47,677 | |||||||
19 Commerce | Exit 8A—Cranbury | NJ | 1989 | S | 65,277 | |||||||
2 Centre Drive | Exit 8A—Cranbury | NJ | 1989 | S | 16,132 | |||||||
429 Ridge Road | Exit 8A—Cranbury | NJ | 1966/1996 | M | 142,385 | |||||||
431 Ridge Road | Exit 8A—Cranbury | NJ | 1958/1998 | S | 170,000 | |||||||
437 Ridge Road | Exit 8A—Cranbury | NJ | 1962/1996 | S | 30,000 | |||||||
47 Commerce | Exit 8A—Cranbury | NJ | 1992/1998 | S | 41,398 | |||||||
7 Centre Drive | Exit 8A—Cranbury | NJ | 1989 | S | 19,466 | |||||||
8 Centre Drive | Exit 8A—Cranbury | NJ | 1986 | S | 16,199 | |||||||
68 Culver Road | Exit 8A—Cranbury | NJ | 2000 | M | 57,280 | |||||||
4301 Route 1 | Monmouth Junction | NJ | 1986 | M | 61,300 | |||||||
695 Route 46 | Wayne | NJ | 1990 | M | 157,394 | |||||||
710 Route 46 | Wayne | NJ | 1985 | M | 101,791 | — | ||||||
# of Operating Buildings: | 14 | |||||||||||
Total Northern / Central New Jersey: | 970,048 | — | ||||||||||
TOTAL OFFICE PROPERTIES | # of Operating Buildings: | 83 | 6,472,631 | 836,588 | ||||||||
Retail Properties | ||||||||||||
114 National Business Parkway | BWI Airport | MD | S | — | 10,000 | |||||||
# of Operating Buildings: | 0 | |||||||||||
TOTAL RETAIL PROPERTIES | — | 10,000 | ||||||||||
TOTAL PORTFOLIO | # of Operating Buildings: | 83 | 6,472,631 | 846,588 | ||||||||
22
Property Occupancy Rates by Region by Quarter
| Office | | | | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Greater Philadelphia | Baltimore/ Washington Corridor | Northern/ Central New Jersey | Greater Harrisburg | Total Office | Retail | Total Portfolio | |||||||
December 31, 2000 | ||||||||||||||
Number of Buildings | 4 | 49 | 14 | 16 | 83 | 0 | 83 | |||||||
Rentable Square Feet | 960,349 | 3,864,766 | 970,048 | 677,468 | 6,472,631 | — | 6,472,631 | |||||||
Percent Occupied | 100.00% | 97.84% | 93.07% | 93.86% | 97.03% | 0% | 97.03% | |||||||
September 30, 2000 | ||||||||||||||
Number of Buildings | 4 | 47 | 15 | 15 | 81 | 1 | 82 | |||||||
Rentable Square Feet | 960,349 | 3,594,058 | 990,385 | 657,685 | 6,202,477 | 149,191 | 6,351,668 | |||||||
Percent Occupied | 100.00% | 97.79% | 96.08% | 92.82% | 97.33% | 97.04% | 97.33% | |||||||
June 30, 2000 | ||||||||||||||
Number of Buildings | 4 | 47 | 15 | 15 | 81 | 1 | 82 | |||||||
Rentable Square Feet | 960,349 | 3,595,118 | 990,808 | 657,685 | 6,203,960 | 149,191 | 6,353,151 | |||||||
Percent Occupied | 100.00% | 97.38% | 92.15% | 94.47% | 96.64% | 97.41% | 96.66% | |||||||
March 31, 2000 | ||||||||||||||
Number of Buildings | 4 | 44 | 14 | 15 | 77 | 2 | 79 | |||||||
Rentable Square Feet | 960,349 | 3,333,590 | 934,059 | 657,685 | 5,885,683 | 195,325 | 6,081,008 | |||||||
Percent Occupied | 100.00% | 98.20% | 92.94% | 94.70% | 97.27% | 96.79% | 97.26% | |||||||
December 31, 1999 | ||||||||||||||
Number of Buildings | 4 | 44 | 14 | 15 | 77 | 2 | 79 | |||||||
Rentable Square Feet | 960,349 | 3,332,641 | 934,059 | 657,685 | 5,884,734 | 191,337 | 6,076,071 | |||||||
Percent Occupied | 100.00% | 97.08% | 96.00% | 98.00% | 97.49% | 96.73% | 97.46% |
23
Top Twenty Office Tenants as of December 31, 2000
(Dollars and Square Feet in thousands)
Tenant | | Number of Leases | Total Occupied Square Feet | Percentage of Total Occupied Square Feet | Total Rental Revenue(1) | Percentage of Total Rental Revenue | Weighted Average Remaining Lease Term(2) | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
United States of America | (3) | 17 | 868 | 13.8% | $ | 14,933 | 14.2% | 4.4 | |||||||
Unisys | (4) | 3 | 741 | 11.8% | 7,297 | 6.9% | 8.5 | ||||||||
AT&T Local Services & affiliates | (5),(6) | 3 | 229 | 3.6% | 4,569 | 4.3% | 6.7 | ||||||||
IBM | (5) | 3 | 200 | 3.2% | 4,069 | 3.9% | 6.6 | ||||||||
Magellan Behaviorial Health, Inc. | 2 | 151 | 2.4% | 3,196 | 3.0% | 3.1 | |||||||||
Booz Allen Hamilton | 4 | 129 | 2.1% | 2,464 | 2.3% | 3.0 | |||||||||
Ciena Corporation | 4 | 202 | 3.2% | 2,365 | 2.2% | 3.4 | |||||||||
Merck & Co., Inc. | (4) | 1 | 219 | 3.5% | 2,193 | 2.1% | 8.5 | ||||||||
General Dynamics Government Corp. | 2 | 94 | 1.5% | 2,028 | 1.9% | 9.8 | |||||||||
Sun Microsystems, Inc. | 3 | 80 | 1.3% | 1,750 | 1.7% | 4.0 | |||||||||
Johns Hopkins University | (6) | 3 | 80 | 1.3% | 1,668 | 1.6% | 5.6 | ||||||||
Credit Management Solutions, Inc. | 1 | 71 | 1.1% | 1,379 | 1.3% | 7.9 | |||||||||
The Associated Press | 1 | 65 | 1.0% | 1,338 | 1.3% | 14.5 | |||||||||
Deutsche Banc Alex. Brown | 1 | 84 | 1.3% | 1,303 | 1.2% | 3.4 | |||||||||
Mentor Technologies | 1 | 60 | 1.0% | 1,294 | 1.2% | 2.2 | |||||||||
Ameritrade Holding Corporation | 1 | 62 | 1.0% | 1,283 | 1.2% | 9.5 | |||||||||
Commonwealth of Pennsylvania | (6) | 4 | 94 | 1.5% | 1,233 | 1.2% | 1.7 | ||||||||
Honeywell International, Inc. | 1 | 150 | 2.4% | 1,200 | 1.1% | 1.0 | |||||||||
Computer Sciences Corporation | 1 | 56 | 0.9% | 1,193 | 1.1% | 1.2 | |||||||||
Raytheon E-Systems | (6) | 3 | 65 | 1.0% | 1,176 | 1.1% | 2.5 | ||||||||
Subtotal Top 20 Office Tenants | 59 | 3,700 | 58.8% | 57,931 | 54.9% | 5.6 | |||||||||
All remaining tenants | 341 | 2,589 | 41.2% | 47,550 | 45.1% | 3.5 | |||||||||
Total/Weighted Average | 400 | 6,289 | 100.0% | $ | 105,481 | 100.0% | 4.6 | ||||||||
- (1)
- Total Rental Revenue is the monthly contractual base rent as of December 31, 2000 multiplied by 12 plus the estimated annualized expense reimbursements under existing office leases.
- (2)
- Weighting of the lease term was computed using Total Rental Revenue.
- (3)
- Many of our government leases are subject to early termination provisions which are customary to government leases. The weighted average remaining lease term was computed assuming no exercise of such early termination rights.
- (4)
- Merck & Co., Inc. subleases 219,065 rentable square feet from Unisys' 960,349 leased rentable square feet.
- (5)
- AT&T Local Services subleases and occupies all of IBM's 200,000 leased rentable square feet through March 2002. AT&T Local Services has signed direct leases for such space (except for 26,928 rentable square feet) from April 1, 2002 through 2006 and 2009. In addition, AT&T Local Services directly leases 57,280 square feet at our 68 Culver property.
- (6)
- Includes affiliated organizations or agencies.
24
Total Rental Revenue by Geographic Region by Quarter(1)
(Dollars in thousands)
| 2000 | 1999 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||||
Office Properties: | ||||||||||||||||
Greater Philadelphia | $ | 2,506 | $ | 2,506 | $ | 2,506 | $ | 2,506 | $ | 2,506 | ||||||
Baltimore/Washington Corridor | 17,224 | 17,197 | 16,297 | 15,830 | 12,404 | |||||||||||
Northern/Central New Jersey | 5,311 | 5,326 | 4,969 | 4,706 | 4,866 | |||||||||||
Greater Harrisburg | 2,271 | 2,228 | 2,275 | 2,395 | 1,924 | |||||||||||
Total Office Properties | 27,312 | 27,257 | 26,047 | 25,437 | 21,700 | |||||||||||
Retail Properties: | ||||||||||||||||
Total Retail Properties | 72 | 261 | 279 | 281 | 290 | |||||||||||
Total Regional Rental Revenue | $ | 27,384 | $ | 27,518 | $ | 26,326 | $ | 25,718 | $ | 21,990 | ||||||
- (1)
- Rental revenue represents GAAP revenue including operating expense reimbursements, straight line rent adjustments and tenant services income.
Net Operating Income by Geographic Region by Quarter
(Dollars in thousands)
| 2000 | 1999 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||||||
Office Properties: | |||||||||||||||||
Greater Philadelphia | $ | 2,481 | $ | 2,482 | $ | 2,482 | $ | 2,477 | $ | 2,490 | |||||||
Baltimore/Washington Corridor | 11,571 | 11,664 | 11,528 | 10,681 | 8,724 | ||||||||||||
Northern/Central New Jersey | 3,418 | 3,458 | 3,014 | 2,920 | 3,065 | ||||||||||||
Greater Harrisburg | 1,718 | 1,683 | 1,645 | 1,812 | 1,591 | ||||||||||||
Total Office Properties | 19,188 | 19,287 | 18,669 | 17,890 | 15,870 | ||||||||||||
Retail Properties: | |||||||||||||||||
Total Retail Properties | 55 | 179 | 222 | 220 | 234 | ||||||||||||
Total Regional NOI | $ | 19,243 | $ | 19,466 | $ | 18,891 | $ | 18,110 | $ | 16,104 | |||||||
Other income / expenses, net | 1,293 | 523 | 89 | 143 | 597 | ||||||||||||
Total NOI | $ | 20,536 | $ | 19,989 | $ | 18,980 | $ | 18,253 | $ | 16,701 | |||||||
25
Same Office Property Cash Net Operating Income by Quarter(1)
(Dollars in thousands)
| 2000 | 1999 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||||
Office Properties:(2) | ||||||||||||||||
Greater Philadelphia | $ | 2,348 | $ | 2,348 | $ | 2,302 | $ | 2,297 | $ | 2,310 | ||||||
Baltimore / Washington Corridor | 8,085 | 7,957 | 8,613 | 8,312 | 7,822 | |||||||||||
Northern / Central New Jersey | 2,822 | 2,807 | 2,357 | 2,806 | 2,932 | |||||||||||
Greater Harrisburg | 1,639 | 1,644 | 1,595 | 1,725 | 981 | |||||||||||
Total Office Properties | $ | 14,893 | $ | 14,755 | $ | 14,868 | $ | 15,141 | $ | 14,046 | ||||||
Same Office Property GAAP Net Operating Income by Quarter(1)
(Dollars in thousands)
| 2000 | 1999 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||||
Office Properties:(2) | ||||||||||||||||
Greater Philadelphia | $ | 2,481 | $ | 2,482 | $ | 2,482 | $ | 2,477 | $ | 2,490 | ||||||
Baltimore / Washington Corridor | 8,221 | 8,302 | 8,905 | 8,598 | 8,135 | |||||||||||
Northern / Central New Jersey | 3,056 | 2,942 | 2,409 | 2,878 | 3,004 | |||||||||||
Greater Harrisburg | 1,676 | 1,681 | 1,643 | 1,810 | 1,020 | |||||||||||
Total Office Properties | $ | 15,434 | $ | 15,407 | $ | 15,439 | $ | 15,763 | $ | 14,650 | ||||||
- (1)
- Net operating income for same office properties has been presented on a GAAP basis and a modified cash basis which removes the effect of straight-line rents from the GAAP net operating income.
- (2)
- Same office properties include buildings owned for a minimum of five reporting quarters.
26
Office Lease Expiration Analysis by Year
Year of Lease Expiration(1) | Number of Leases Expiring | Square Footage of Leases Expiring | Percentage of Total Occupied Square Feet | Total Rental Revenue of Expiring Leases(2) | Percentage of Total Rental Revenue Expiring | Total Rental Revenue of Expiring Leases per Occupied Square Foot | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | ($000s) | | | ||||||||
2001 | 83 | 682,906 | 10.9% | $ | 10,544 | 10.0% | $ | 15.44 | ||||||
2002 | 81 | 978,397 | 15.6% | 16,777 | 15.9% | 17.15 | ||||||||
2003 | 89 | 925,536 | 14.7% | 17,108 | 16.2% | 18.48 | ||||||||
2004 | 48 | 585,463 | 9.3% | 11,006 | 10.4% | 18.80 | ||||||||
2005 | 57 | 585,929 | 9.3% | 11,125 | 10.5% | 18.99 | ||||||||
2006 | 7 | 219,722 | 3.5% | 3,775 | 3.6% | 17.18 | ||||||||
2007 | 7 | 188,326 | 3.0% | 2,938 | 2.8% | 15.60 | ||||||||
2008 | 9 | 539,101 | 8.6% | 10,440 | 9.9% | 19.37 | ||||||||
2009 | 11 | 1,193,500 | 19.0% | 13,477 | 12.8% | 11.29 | ||||||||
2010 | 7 | 325,272 | 5.2% | 6,954 | 6.6% | 21.38 | ||||||||
2015 | 1 | 65,277 | 1.0% | 1,338 | 1.3% | 20.50 | ||||||||
Total/Weighted Average | 400 | 6,289,429 | 100.0% | $ | 105,481 | 100.0% | $ | 17.31 | ||||||
NOTE: As of December 31, 2000, the weighted average lease term is 4.6 years.
- (1)
- Many of our government leases are subject to certain early termination provisions which are customary to government leases. The year of lease expiration was computed assuming no exercise of such early termination rights.
- (2)
- Total Rental Revenue is the monthly contractual base rent as of December 31, 2000 multiplied by 12 plus the estimated annualized expense reimbursements under existing office leases.
27
Year to Date Office Renewal Analysis
| Greater Philadelphia | Baltimore/ Washington Corridor | Northern/ Central New Jersey | Greater Harrisburg | Total Office | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
As of December 31, 2000: | ||||||||||||||||
Expiring Square Feet | — | 483,339 | 151,975 | 65,986 | 701,300 | |||||||||||
Vacated Square Feet | — | 153,154 | 42,877 | 17,377 | 213,408 | |||||||||||
Renewed Square Feet | — | 330,185 | 109,098 | 48,609 | 487,892 | |||||||||||
Retention Rate (% based upon square feet) | 0.00% | 68.31% | 71.79% | 73.67% | 69.57% | |||||||||||
Renewal & Retenanted Space: | ||||||||||||||||
Increase in Base Rent—Straight-line | 0.00% | 14.10% | 20.80% | 0.68% | 15.65% | |||||||||||
Increase in Total Rent—Straight-line | 0.00% | 10.10% | 13.41% | 2.22% | 10.42% | |||||||||||
Increase in Base Rent—Cash | 0.00% | 10.49% | 14.22% | - -1.05% | 10.59% | |||||||||||
Increase in Total Rent—Cash | 0.00% | 6.64% | �� | 4.42% | 0.62% | 5.71% | ||||||||||
Average Capital Cost per Square Foot | $ | — | $ | 6.27 | $ | 21.34 | $ | 2.81 | $ | 9.28 |
Quarterly Office Renewal Analysis
| Greater Philadelphia | Baltimore/ Washington Corridor | Northern/ Central New Jersey | Greater Harrisburg | Total Office | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quarter Ended December 31, 2000: | ||||||||||||||||
Expiring Square Feet | — | 75,372 | 3,174 | 6,623 | 85,169 | |||||||||||
Vacated Square Feet | — | 29,132 | — | — | 29,132 | |||||||||||
Renewed Square Feet | — | 46,240 | 3,174 | 6,623 | 56,037 | |||||||||||
Retention Rate (% based upon square feet) | 0.00% | 61.35% | 100.00% | 100.00% | 65.80% | |||||||||||
Renewal & Retenanted Space: | ||||||||||||||||
Increase in Base Rent—Straight-line | 0.00% | 24.55% | 21.47% | -17.49% | 17.74% | |||||||||||
Increase in Total Rent—Straight-line | 0.00% | 15.08% | 11.19% | -9.98% | 10.57% | |||||||||||
Increase in Base Rent—Cash | 0.00% | 18.45% | 20.00% | - -18.85% | 13.19% | |||||||||||
Increase in Total Rent—Cash | 0.00% | 9.73% | 10.01% | -11.15% | 6.66% | |||||||||||
Average Capital Cost per Square Foot | $ | — | $ | 10.27 | $ | 17.92 | $ | 1.10 | $ | 9.72 | ||||||
Quarter Ended September 30, 2000: | ||||||||||||||||
Expiring Square Feet | — | 186,061 | 116,771 | 6,757 | 309,589 | |||||||||||
Vacated Square Feet | — | 50,043 | 40,094 | 6,757 | 96,894 | |||||||||||
Renewed Square Feet | — | 136,018 | 76,677 | — | 212,695 | |||||||||||
Retention Rate (% based upon square feet) | 0.00% | 73.10% | 65.66% | 0.00% | 68.70% | |||||||||||
Renewal & Retenanted Space: | ||||||||||||||||
Increase in Base Rent—Straight-line | 0.00% | 6.31% | 32.53% | 0.00% | 14.75% | |||||||||||
Increase in Total Rent—Straight-line | 0.00% | 4.24% | 20.06% | 0.00% | 9.74% | |||||||||||
Increase in Base Rent—Cash | 0.00% | 3.45% | 13.01% | 0.00% | 6.52% | |||||||||||
Increase in Total Rent—Cash | 0.00% | 1.44% | 2.97% | 0.00% | 1.97% | |||||||||||
Average Capital Cost per Square Foot | $ | — | $ | 5.32 | $ | 27.35 | $ | — | $ | 12.57 |
28
Quarterly Office Renewal Analysis
| Greater Philadelphia | Baltimore/ Washington Corridor | Northern/ Central New Jersey | Greater Harrisburg | Total Office | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quarter Ended June 30, 2000: | ||||||||||||||||
Expiring Square Feet | — | 71,275 | 10,322 | 23,483 | 105,080 | |||||||||||
Vacated Square Feet | — | 34,644 | — | 3,920 | 38,564 | |||||||||||
Renewed Square Feet | — | 36,631 | 10,322 | 19,563 | 66,516 | |||||||||||
Retention Rate (% based upon square feet) | 0.00% | 51.39% | 100.00% | 83.31% | 63.30% | |||||||||||
Renewal & Retenanted Space: | ||||||||||||||||
Increase in Base Rent—Straight-line | 0.00% | 18.79% | 15.87% | 4.15% | 17.03% | |||||||||||
Increase in Total Rent—Straight-line | 0.00% | 14.10% | 4.75% | 3.69% | 11.05% | |||||||||||
Increase in Base Rent—Cash | 0.00% | 13.92% | 14.87% | 0.78% | 13.14% | |||||||||||
Increase in Total Rent—Cash | 0.00% | 9.43% | 3.42% | 0.38% | 7.33% | |||||||||||
Average Capital Cost per Square Foot | $ | — | $ | 7.40 | $ | 19.95 | $ | 4.58 | $ | 9.85 | ||||||
Quarter Ended March 31, 2000: | ||||||||||||||||
Expiring Square Feet | — | 150,631 | 21,708 | 29,123 | 201,462 | |||||||||||
Vacated Square Feet | — | 39,335 | 2,783 | 6,700 | 48,818 | |||||||||||
Renewed Square Feet | — | 111,296 | 18,925 | 22,423 | 152,644 | |||||||||||
Retention Rate (% based upon square feet) | 0.00% | 73.89% | 87.18% | 76.99% | 75.77% | |||||||||||
Renewal & Retenanted Space: | ||||||||||||||||
Increase in Base Rent—Straight-line | 0.00% | 14.11% | 12.66% | 15.09% | 14.06% | |||||||||||
Increase in Total Rent—Straight-line | 0.00% | 10.72% | 7.59% | 14.06% | 10.63% | |||||||||||
Increase in Base Rent—Cash | 0.00% | 12.14% | 12.09% | 14.66% | 12.38% | |||||||||||
Increase in Total Rent—Cash | 0.00% | 8.81% | 7.17% | 13.64% | 9.05% | |||||||||||
Average Capital Cost per Square Foot | $ | — | $ | 4.25 | $ | 1.46 | $ | 3.24 | $ | 3.84 | ||||||
Quarter Ended December 31, 1999: | ||||||||||||||||
Expiring Square Feet | — | 75,165 | 3,274 | 89,542 | 167,981 | |||||||||||
Vacated Square Feet | — | 3,996 | 3,274 | 25,567 | 32,837 | |||||||||||
Renewed Square Feet | — | 71,169 | — | 63,975 | 135,144 | |||||||||||
Retention Rate (% based upon square feet) | 0.00% | 94.68% | 0.00% | 71.45% | 80.45% | |||||||||||
Renewal & Retenanted Space: | ||||||||||||||||
Increase in Base Rent—Straight-line | 0.00% | 14.45% | 39.85% | 12.14% | 17.90% | |||||||||||
Increase in Total Rent—Straight-line | 0.00% | 13.00% | 40.08% | 10.85% | 16.79% | |||||||||||
Increase in Base Rent—Cash | 0.00% | 9.22% | 31.03% | 10.36% | 13.01% | |||||||||||
Increase in Total Rent—Cash | 0.00% | 7.87% | 31.80% | 9.25% | 12.14% | |||||||||||
Average Capital Cost per Square Foot | $ | — | $ | 5.44 | $ | 37.73 | $ | 1.39 | $ | 8.68 |
29
Acquisition Summary as of December 31, 2000
(Dollars in Thousands)
| Submarket | Acquisition Date | Square Feet | Occupied Sq Ft at Acquisition | Occupancy Percentage at Acquisition | December 31, 2000 Occupancy Percentage | Investment(1) | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Individual | |||||||||||||||
7240 Parkway Drive | BWI Airport | 4/18/2000 | 73,500 | 73,500 | 100.0% | 98.3% | $ | 7,464 | |||||||
9140 Route 108 | Howard County Perimeter | 12/14/2000 | 150,000 | 150,000 | 100.0% | 100.0% | 7,149 | ||||||||
Total | 223,500 | 223,500 | $ | 14,613 | |||||||||||
Disposition Summary as of December 31, 2000
(Dollars in Thousands)
| Submarket | Disposition Date | Square Feet | Gross Sales Proceeds | Debt Assumption or Repayment | Net Cash Proceeds | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Individual Retail Properties | |||||||||||||||
2100 S. Broadway | Minot, ND | 6/19/2000 | 46,134 | $ | 2,970 | $ | 2,432 | $ | 538 | ||||||
322 Marlboro Street | Easton, MD | 11/10/2000 | 149,191 | 5,800 | 2,755 | 3,045 | |||||||||
195,325 | $ | 8,770 | $ | 5,187 | $ | 3,583 | |||||||||
Individual Office Properties | |||||||||||||||
3 Centre Drive | Cranbury, NJ | 12/28/2000 | 20,436 | $ | 2,790 | $ | 1,755 | $ | 1,035 | ||||||
- (1)
- Recorded investment by property as of December 31, 2000.
NOTE: COPT classifies its acquisitions by type — entity, portfolio or individual acquisitions. Entity acquisitions are defined as mergers of significant portfolios of $100 + million with strong management organizations and a regional presence.
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DEVELOPMENT SUMMARY AS OF DECEMBER 31, 2000
(Dollars in Thousands except per square foot data)
Property and Location | | Submarket | Rentable Square Feet | Percentage Pre-Leased or Committed | Anticipated Cost per Rentable Square Foot | Anticipated Cost | Cost to date | Anticipated Stabilization/ Delivery | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Under Construction | |||||||||||||||||||
6750 Alexander Bell Drive Columbia, MD | (1) | Howard County Perimeter | 78,460 | 87.00% | $ | 163 | $ | 12,823 | $ | 12,452 | January 2001 | ||||||||
1304 Concourse Drive Linthicum, MD | (2) | BWI Airport | 100,000 | 0.00% | 166 | 16,572 | 7,097 | September 2001 | |||||||||||
2701 Phoenix Road (201 NBP) Annapolis Junction, MD | (3) | BWI Airport | 118,000 | 51.91% | 155 | 18,313 | 5,280 | September 2001 | |||||||||||
6731 Columbia Gateway Drive Columbia, Maryland | (4) | Howard County Perimeter | 122,889 | 0.00% | 176 | 21,613 | 6,933 | November 2001 | |||||||||||
2711 Phoenix Road (211 NBP) Annapolis Junction, MD | (5) | BWI Airport | 150,000 | 100.00% | 174 | 26,135 | 5,615 | March 2002 | |||||||||||
Total Under Construction: | 569,349 | 49.09% | $ | 168 | $ | 95,456 | $ | 37,376 | |||||||||||
Under Development | |||||||||||||||||||
114 National Business Parkway Annapolis Junction, MD | BWI Airport | 10,000 | 100.00% | $ | 164 | $ | 1,644 | $ | 528 | July 2001 | |||||||||
Robert Fulton Drive—Phase I Columbia, Maryland | (6) | Howard County Perimeter | 144,350 | 0.00% | 119 | 17,247 | 4,536 | October 2001 | |||||||||||
6711 Columbia Gateway Drive Columbia, Maryland | Howard County Perimeter | 122,889 | 0.00% | 179 | 22,000 | 4,257 | (7) | ||||||||||||
Total Under Development: | 277,239 | 3.61% | $ | 147 | $ | 40,891 | $ | 9,321 | |||||||||||
TOTAL / AVERAGE | 846,588 | 34.20% | $ | 161 | $ | 136,347 | $ | 46,697 | |||||||||||
- (1)
- We obtained a $9,325 construction loan and $6,350 is outstanding as of December 31, 2000.
- (2)
- We obtained a $11,800 construction loan and $1,626 is outstanding as of December 31, 2000.
- (3)
- On September 29, 2000, we contributed this development asset into a joint venture. The joint venture obtained a $13,725 construction loan in October 2000 and $1,667 is outstanding as of December 31, 2000.
- (4)
- We obtained a $15,750 construction loan. No draws have been made as of December 31, 2000.
- (5)
- On December 15, 2000, we contributed this development asset into a joint venture. The joint venture has obtained a $20,550 construction loan commitment.
- (6)
- We participate in the development of this asset through a joint venture arrangement.
- (7)
- Construction and delivery is contingent upon completion and lease-up of 6731 Columbia Gateway Drive. We obtained a $2,000 land loan in December 2000.
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