PS Business Parks 8K Results of Operations and Financial Condition | PSBXP 28 Oct 20

Exhibit 99.2

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SUPPLEMENTAL INFORMATION

THIRD QUARTER 2020

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701 WESTERN AVENUE | GLENDALE, CA 91201 | 818.244.8080 | PSBUSINESSPARKS.COM

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ANALYSIS OF OPERATING RESULTS AND FINANCIAL CONDITION FOR

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020


			Page

Consolidated Balance Sheets			3

Consolidated Statements of Income			5

Portfolio Summary			7

Third Quarter Fact Sheet			8

Same Park Cash NOI by Region and Type			9

Analysis of Capital Expenditures			11

Funds from Operations (FFO), Core FFO and Funds Available for Distribution (FAD)			12

Capital Structure and Financial Condition			14

Portfolio Operating Analysis and Statistics			15

Lease Expirations			22

Third Quarter- and Year-to-Date Production Statistics			26

Definitions and Non-GAAP Disclosures			27

Forward-Looking Statements

When used within this supplemental information package, the words “may,” “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” “intends,” and similar expressions are intended to identify “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results and performance of the Company to be materially different from those expressed or implied in the forward-looking statements. Such factors include the duration and severity of the COVID-19 pandemic and its impact on our business and our customers; the impact of competition from new and existing commercial facilities which could impact rents and occupancy levels at the Company’s facilities; the Company’s ability to evaluate, finance, and integrate acquired and developed properties into the Company’s existing operations; the Company’s ability to effectively compete in the markets that it does business in; the impact of the regulatory environment as well as national, state, and local laws and regulations including, without limitation, those governing REITs; the impact of general economic and business conditions, including as a result of the economic fallout of the COVID-19 pandemic; rental rates and occupancy levels at the Company’s facilities; and changes in these conditions as a result of the COVID-19 pandemic, the availability of permanent capital at attractive rates, the outlook and actions of rating agencies and risks detailed from time to time in the Company’s SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K, and annual reports on Form 10-K.

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	September 30, 2020		December 31, 2019
ASSETS

Cash and cash equivalents	$	117,881	$	62,786	(a)

Real estate facilities, at cost
Land		855,542		844,419
Buildings and improvements		2,213,798		2,203,308

		3,069,340		3,047,727
Accumulated depreciation		(1,210,473)		(1,158,489)

		1,858,867		1,889,238	(b)
Properties held for sale, net ⁽¹⁾		-		15,264
Land and building held for development, net		35,506		28,110

		1,894,373		1,932,612

Rent receivable		1,790		1,392	(c)
Deferred rent receivable ⁽²⁾		37,361		32,993
Other assets		13,348		16,660	(d)

Total assets	$	2,064,753	$	2,046,443


LIABILITIES AND EQUITY

Accrued and other liabilities	$	87,808	$	84,632	(e)

Total liabilities		87,808		84,632

Equity
PS Business Parks, Inc.’s shareholders’ equity:
Preferred stock		944,750		944,750
Common stock		274		274
Paid-in capital		737,065		736,986	(f)
Accumulated earnings		75,393		63,666	(g)

Total PS Business Parks, Inc.’s shareholders’ equity		1,757,482		1,745,676
Noncontrolling interests		219,463		216,135

Total equity		1,976,945		1,961,811

Total liabilities and equity	$	2,064,753	$	2,046,443

See following page for additional detail related to the tickmarks shown in the table above.

⁽¹⁾

On September 16, 2020, the Company completed the sale of two industrial buildings totaling 40,000 square feet located in Redmond, Washington, which were subject to an eminent domain process, for a gross sales price of $11.4 million. Properties held for sale, net as of December 31, 2019 represents the same two industrial buildings mentioned above along with one single-tenant building totaling 113,000 square feet located in Montgomery County, Maryland, which sold on January 7, 2020 for a gross sales price of $30.0 million.

⁽²⁾	Increase in deferred rent receivable is primarily attributable to rent deferral arrangements that the Company entered into with certain customers as a result of the COVID-19 pandemic.

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(a)	Change in cash and cash equivalents
	Beginning cash balance at December 31, 2019					$	62,786
	Net cash provided by operating activities						211,557
	Net cash used in investing activities						(6,540)
	Net cash used in financing activities						(149,922)

	Ending cash balance at September 30, 2020					$	117,881


(b)	Change in real estate facilities, at cost
	Beginning balance at December 31, 2019					$	1,889,238
	Acquisition of real estate						13,276
	Recurring capital improvements						6,413
	Tenant improvements, gross						11,208
	Capitalized lease commissions						5,225
	Nonrecurring capital improvements						512
	Depreciation and amortization of real estate facilities						(67,035)
	Transfer to properties held for sale						30

	Ending balance at September 30, 2020					$	1,858,867



						Increase
(c)	Change in rent receivable	September 30, 2020		December 31, 2019		(Decrease)
	Non-government customers	$	1,079	$	597	$	482
	U.S. Government customers		711		795		(84)

		$	1,790	$	1,392	$	398


						Increase
(d)	Change in other assets	September 30, 2020		December 31, 2019		(Decrease)
	Lease intangible assets, net	$	7,181	$	9,973	$	(2,792)
	Prepaid property taxes and insurance		4,379		2,572		1,807
	Other		1,788		4,115		(2,327)

		$	13,348	$	16,660	$	(3,312)


						Increase
(e)	Change in accrued and other liabilities	September 30, 2020		December 31, 2019		(Decrease)
	Customer security deposits	$	37,999	$	39,118	$	(1,119)
	Accrued property taxes		22,018		11,521		10,497
	Customer prepaid rent		11,862		14,519		(2,657)
	Lease intangible liabilities, net		6,298		8,541		(2,243)
	Other		9,631		10,933		(1,302)

		$	87,808	$	84,632	$	3,176


(f)	Change in paid-in capital
	Beginning paid-in capital at December 31, 2019					$	736,986
	Exercise of stock options						259
	Stock compensation expense, net						3,922
	Cash paid for taxes in lieu of shares upon vesting of restricted stock units						(4,102)

	Ending paid-in capital at September 30, 2020					$	737,065


(g)	Change in accumulated earnings
	Beginning accumulated earnings at December 31, 2019					$	63,666
	Net income						134,399
	Distributions to preferred shareholders						(36,139)
	Distributions to common shareholders						(86,533)

	Ending accumulated earnings at September 30, 2020					$	75,393

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	For The Three Months				For the Nine Months Ended
	Ended September 30,				Ended September 30,
	2020		2019		2020		2019

Rental income	$	103,760	$	108,064	$	310,535	$	323,671	(a)

Expenses:
Cost of operations		32,096		32,468		93,490		97,521	(b)
Depreciation and amortization		23,064		26,220		72,646		75,863
General and administrative		5,047		4,051		11,374		10,111	(c)

Total operating expenses		60,207		62,739		177,510		183,495


Interest and other income		230		1,384		1,012		2,766	(d)
Interest and other expense		(536)		(199)		(900)		(484)	(e)
Gain on sale of real estate facility		7,652		-		27,273		-

Net income		50,899		46,510		160,410		142,458
Allocation to noncontrolling interests		(8,124)		(7,020)		(26,011)		(21,670)

Net income allocable to PS Business Parks, Inc.		42,775		39,490		134,399		120,788
Allocation to preferred shareholders		(12,046)		(12,959)		(36,139)		(38,877)
Allocation to restricted stock unit holders		(149)		(219)		(543)		(699)

Net income allocable to common shareholders	$	30,580	$	26,312	$	97,717	$	81,212


Net income per common share
Basic	$	1.11	$	0.96	$	3.56	$	2.96
Diluted	$	1.11	$	0.96	$	3.55	$	2.95

Weighted average common shares outstanding
Basic		27,483		27,432		27,470		27,411
Diluted		27,565		27,543		27,560		27,512

See following page for additional detail related to the tickmarks shown in the table above.

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		For The Three Months Ended				Increase		For the Nine Months Ended				Increase
(a)	Rental income:	September 30, 2020		September 30, 2019		(Decrease)		September 30, 2020		September 30, 2019		(Decrease)
	Same Park ⁽¹⁾ ⁽²⁾	$	95,096	$	94,388	$	708	$	282,171	$	282,644	$	(473)
	Same Park non-cash rental income ⁽¹⁾ ⁽³⁾		1,303		749		554		4,620		1,891		2,729
	Non-Same Park ⁽¹⁾ ⁽²⁾		4,767		3,340		1,427		15,093		8,853		6,240
	Non-Same Park non-cash rental income ⁽¹⁾ ⁽³⁾		226		258		(32)		716		655		61
	Multifamily		2,201		2,519		(318)		7,249		7,492		(243)
	Rental income from assets sold ⁽⁴⁾		167		6,810		(6,643)		686		22,136		(21,450)

		$	103,760	$	108,064	$	(4,304)	$	310,535	$	323,671	$	(13,136)


		For The Three Months Ended				Increase		For the Nine Months Ended				Increase
(b)	Cost of operations:	September 30, 2020		September 30, 2019		(Decrease)		September 30, 2020		September 30, 2019		(Decrease)
	Same Park ⁽¹⁾	$	28,903	$	27,452	$	1,451	$	84,034	$	82,278	$	1,756
	Same Park non-cash expense ⁽¹⁾ ⁽⁵⁾		227		277		(50)		730		817		(87)
	Non-Same Park ⁽¹⁾		1,843		1,137		706		5,446		3,304		2,142
	Non-Same Park non-cash expense ⁽¹⁾ ⁽⁵⁾		16		15		1		53		41		12
	Multifamily		1,066		1,045		21		3,084		3,118		(34)
	Expenses from assets sold ⁽⁴⁾		41		2,542		(2,501)		143		7,963		(7,820)

		$	32,096	$	32,468	$	(372)	$	93,490	$	97,521	$	(4,031)


		For The Three Months Ended				Increase		For the Nine Months Ended				Increase
(c)	General and administrative expenses:	September 30, 2020		September 30, 2019		(Decrease)		September 30, 2020		September 30, 2019		(Decrease)
	Compensation expense	$	1,431	$	1,333	$	98	$	4,608	$	4,294	$	314
	Stock compensation expense		2,275		1,793		482		3,608		3,081		527
	Professional fees and other		1,341		925		416		3,158		2,736		422

		$	5,047	$	4,051	$	996	$	11,374	$	10,111	$	1,263


		For The Three Months Ended				Increase		For the Nine Months Ended				Increase
(d)	Interest and other income:	September 30, 2020		September 30, 2019		(Decrease)		September 30, 2020		September 30, 2019		(Decrease)
	Management fee income	$	65	$	71	$	(6)	$	198	$	221	$	(23)
	Interest income		20		175		(155)		365		817		(452)
	Other income		145		1,138		(993)		449		1,728		(1,279)

		$	230	$	1,384	$	(1,154)	$	1,012	$	2,766	$	(1,754)


		For The Three Months Ended				Increase		For the Nine Months Ended				Increase
(e)	Interest and other expense:	September 30, 2020		September 30, 2019		(Decrease)		September 30, 2020		September 30, 2019		(Decrease)
	Interest expense	$	-	$	(47)	$	47	$	-	$	(47)	$	47
	Credit facilities fees & other charges		(536)		(152)		(384)		(900)		(437)		(463)

		$	(536)	$	(199)	$	(337)	$	(900)	$	(484)	$	(416)

⁽¹⁾	Refer to page 27, Definitions and Non-GAAP Disclosures, for the definitions of Same Park and Non-Same Park.

⁽²⁾

Same Park rental income is presented net of (a) accounts receivable write-offs of $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively, and $1.4 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively, and (b) rent deferrals and abatements of $2.0 million and $0 for the three months ended September 30, 2020 and 2019, respectively, and $6.5 million and $0 for the nine months ended September 30, 2020 and 2019, respectively. Non-Same Park rental income is presented net of (a) accounts receivable write-offs of $0 for both the three months ended September 30, 2020 and 2019, and $0.1 million and $0 for the nine months ended September 30, 2020 and 2019, respectively, and (b) rent deferrals and abatements of $0.1 million and $0 for the three months ended September 30, 2020 and 2019, respectively, and $0.2 million and $0 for the nine months ended September 30, 2020 and 2019, respectively.

⁽³⁾

Non-cash rental income represents amortization of deferred rent receivable, amortization of above and below market rents, net, and amortization of lease incentives and tenant improvement reimbursements. Same Park non-cash rental income is presented net of deferred rent receivable write-offs of $0.3 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $2.6 million and $0.4 million for the nine months ended September 30, 2020 and 2019, respectively. Non-Same Park non-cash rental income is presented net of deferred rent receivable write-offs of $0 for both the three months ended September 30, 2020 and 2019, and $0.1 million and $0 for the nine months ended September 30, 2020 and 2019, respectively.

⁽⁴⁾

Amounts for the three months ended September 30, 2020 include results related to two industrial buildings totaling 40,000 square feet sold in September 2020; amounts for the nine months ended September 30, 2020 include the two industrial buildings totaling 40,000 square feet sold in September 2020 and a 113,000 square foot office building sold in January 2020; amounts for the three and nine months ended September 30, 2019 reflect the operating results of the two industrial buildings totaling 40,000 square feet sold in September 2020, the 113,000 square foot office building sold in January 2020, and 1.3 million square feet of assets sold in October 2019.

⁽⁵⁾	Non-cash expense represents stock compensation expense attributable to employees whose compensation expense is recorded in costs of operations.

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PROPERTY INFORMATION ⁽¹⁾

	For The Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020		2019		% Change		2020		2019		% Change
Total Portfolio⁽²⁾
Total rentable square footage at period end		27,482,000		27,330,000		0.6%		27,482,000		27,330,000		0.6%
Weighted average occupancy		91.2%		94.4%		(3.4%)		91.9%		94.1%		(2.3%)
Period end occupancy		91.3%		94.4%		(3.3%)		91.3%		94.4%		(3.3%)
Revenue per occupied sq. ft.^{(3) (4)}	$	16.17	$	15.52		4.2%	$	15.97	$	15.54		2.8%
RevPAF^{(3) (4)}	$	14.76	$	14.66		0.7%	$	14.68	$	14.62		0.4%

Same Park Portfolio ⁽³⁾
Total rentable square footage at period end		25,656,000		25,656,000		-		25,656,000		25,656,000		-
Weighted average occupancy		92.3%		94.7%		(2.5%)		92.5%		94.5%		(2.1%)
Period end occupancy		92.3%		94.5%		(2.3%)		92.3%		94.5%		(2.3%)
Revenue per occupied sq. ft.^{(3) (5)}	$	16.29	$	15.66		4.0%	$	16.11	$	15.64		3.0%
RevPAF^{(3) (5)}	$	15.03	$	14.83		1.3%	$	14.90	$	14.79		0.7%

Non-Same Park Portfolio ⁽³⁾
Total rentable square footage at period end		1,826,000		1,674,000		9.1%		1,826,000		1,674,000		9.1%
Weighted average occupancy		76.9%		89.5%		(14.1%)		83.9%		83.8%		0.1%
Period end occupancy		77.7%		93.3%		(16.7%)		77.7%		93.3%		(16.7%)
Revenue per occupied sq. ft.^{(3) (6)}	$	14.22	$	12.51		13.7%		13.77		13.11		5.0%
RevPAF^{(3) (6)}	$	10.93	$	11.21		(2.5%)		11.55		10.99		5.1%

Multifamily Portfolio
Number of units		395		395		-		395		395		-
Weighted average occupancy		91.1%		95.6%		(4.7%)		92.6%		95.3%		(2.9%)
Period end occupancy		94.4%		94.7%		(0.3%)		94.4%		94.7%		(0.3%)

⁽¹⁾	Excludes assets sold for the periods shown.

⁽²⁾	Operating metrics from our multifamily asset are excluded from total portfolio operating metrics.

⁽³⁾	Refer to page 27, Definitions and Non-GAAP Disclosures, for the definitions of Revenue per Occupied Square Foot, RevPAF, Same Park and Non-Same Park.

⁽⁴⁾

Included in the calculation of Total Park revenue per occupied square foot and RevPAF is (a) lease buyout income of $0.3 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively, and $0.8 million and $1.1 million for the nine months ended September 30, 2020 and 2019, respectively, (b) accounts receivable write-offs of $0.3 million for both the three months ended September 30, 2020 and 2019, and $1.5 million and $0.9 million for the nine months ended September 30, 2020 and 2019, respectively, and (c) deferred rent receivable write-offs of $0.3 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $2.7 million and $0.4 million for the nine months ended September 30, 2020 and 2019, respectively.

⁽⁵⁾

Included in the calculation of Same Park revenue per occupied square foot and RevPAF is (a) lease buyout income of $0.3 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively, and $0.8 million and $1.1 million for the nine months ended September 30, 2020 and 2019, respectively, (b) accounts receivable write-offs of $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively, and $1.4 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively, and (c) deferred rent receivable write-offs of $0.3 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $2.6 million and $0.4 million for the nine months ended September 30, 2020 and 2019, respectively.

⁽⁶⁾

Included in the calculation of Non-Same Park revenue per occupied square foot and RevPAF is (a) lease buyout income of $0 for both the three and nine months ended September 30, 2020 and 2019, (b) accounts receivable write-offs of $0 for both the three months ended September 30, 2020 and 2019, and $0.1 million and $0 for the nine months ended September 30, 2020 and 2019, respectively, and (c) deferred rent receivable write-offs of $0 for both the three months ended September 30, 2020 and 2019, and $0.1 million and $0 for the nine months ended September 30, 2020 and 2019, respectively.

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NET OPERATING INCOME


	For The Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020		2019		% Change		2020		2019		% Change
Rental income
Same Park ^{(1) (2) (3)}	$	96,399	$	95,137		1.3%	$	286,791	$	284,535		0.8%
Non-Same Park ⁽¹⁾		4,993		3,598		38.8%		15,809		9,508		66.3%
Multifamily		2,201		2,519		(12.6%)		7,249		7,492		(3.2%)
Assets sold		167		6,810		(97.5%)		686		22,136		(96.9%)

Total rental income		103,760		108,064		(4.0%)		310,535		323,671		(4.1%)

Adjusted cost of operations ^{(1) (5)}
Same Park ^{(1) (6)}		28,903		27,452		5.3%		84,034		82,278		2.1%
Non-Same Park ⁽¹⁾		1,843		1,137		62.1%		5,446		3,304		64.8%
Multifamily		1,066		1,045		2.0%		3,084		3,118		(1.1%)
Assets sold		41		2,525		(98.4%)		143		7,911		(98.2%)

Total		31,853		32,159		(1.0%)		92,707		96,611		(4.0%)

Net operating income
Same Park ⁽¹⁾		67,496		67,685		(0.3%)		202,757		202,257		0.2%
Non-Same Park ⁽¹⁾		3,150		2,461		28.0%		10,363		6,204		67.0%
Multifamily		1,135		1,474		(23.0%)		4,165		4,374		(4.8%)
Assets sold		126		4,285		(97.1%)		543		14,225		(96.2%)

Total net operating income	$	71,907	$	75,905		(5.3%)	$	217,828	$	227,060		(4.1%)


CASH NET OPERATING INCOME

	For The Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020		2019		% Change		2020		2019		% Change
Cash rental income ^{(1) (5)}
Same Park ^{(1) (2) (4)}	$	95,096	$	94,388		0.8%	$	282,171	$	282,644		(0.2%)
Non-Same Park ⁽¹⁾		4,767		3,340		42.7%		15,093		8,853		70.5%
Multifamily		2,200		2,518		(12.6%)		7,245		7,488		(3.2%)
Assets sold		167		6,696		(97.5%)		686		21,618		(96.8%)

Total cash rental income		102,230		106,942		(4.4%)		305,195		320,603		(4.8%)

Adjusted cost of operations ^{(1) (5)}
Same Park ^{(1) (6)}		28,903		27,452		5.3%		84,034		82,278		2.1%
Non-Same Park ⁽¹⁾		1,843		1,137		62.1%		5,446		3,304		64.8%
Multifamily		1,066		1,045		2.0%		3,084		3,118		(1.1%)
Assets sold		41		2,525		(98.4%)		143		7,911		(98.2%)

Total adjusted cost of operations		31,853		32,159		(1.0%)		92,707		96,611		(4.0%)

Cash net operating income
Same Park ⁽¹⁾		66,193		66,936		(1.1%)		198,137		200,366		(1.1%)
Non-Same Park ⁽¹⁾		2,924		2,203		32.7%		9,647		5,549		73.9%
Multifamily		1,134		1,473		(23.0%)		4,161		4,370		(4.8%)
Assets sold		126		4,171		(97.0%)		543		13,707		(96.0%)

Total cash net operating income	$	70,377	$	74,783		(5.9%)	$	212,488	$	223,992		(5.1%)


EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre) ⁽¹⁾

	For The Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020		2019		% Change		2020		2019		% Change
Net income	$	50,899	$	46,510		9.4%	$	160,410	$	142,458		12.6%
Net interest (income) expense		117		8		1362.5%		45		(362)		112.4%
Depreciation and amortization		23,064		26,220		(12.0%)		72,646		75,863		(4.2%)
Gain on sale of real estate facilities and development rights		(7,652)		-		100.0%		(27,273)		-		100.0%

EBITDAre	$	66,428	$	72,738		(8.7%)	$	205,828	$	217,959		(5.6%)

⁽¹⁾	Refer to page 27, Definition and Non-GAAP Disclosures, for the definitions of Same Park, Non-Same Park, Cash Rental Income, Adjusted Cost of Operations, and EBITDAre.

⁽²⁾	Same Park rental income and cash rental income include lease buyout income of $0.3 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively, and $0.8 million and $1.1 million for the nine months ended September 30, 2020 and 2019, respectively.

⁽³⁾

⁽⁴⁾

Same Park cash rental income is presented net of (a) accounts receivable write-offs of $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively, and $1.4 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively, and (b) rent deferrals and abatements of $2.0 million and $0 for the three months ended September 30, 2020 and 2019, respectively, and $6.5 million and $0 for the nine months ended September 30, 2020 and 2019, respectively.

⁽⁵⁾	Refer to page 6 for a reconciliation of cash rental income to rental income and adjusted cost of operations to cost of operations as reported on our GAAP statements of income.

⁽⁶⁾	The table below details Same Park adjusted cost of operations:


	For The Three Months Ended September 30,							For the Nine Months Ended September 30,
	2020		2019		% Change			2020		2019		% Change
Cost of operations
Property taxes	$	10,811	$	10,224		5.7	%	$	32,410	$	30,416		6.6	%
Utilities		4,870		5,249		(7.2	%)		14,106		14,610		(3.4	%)
Repairs and maintenance		6,197		5,844		6.0	%		17,277		17,394		(0.7	%)
Payroll		4,090		3,622		12.9	%		12,030		11,070		8.7	%
Snow removal		-		-		-			78		1,033		(92.4	%)
Property insurance		1,283		868		47.8	%		3,009		2,346		28.3	%
Other expenses		1,652		1,645		0.4	%		5,124		5,409		(5.3	%)

Total cost of operations	$	28,903	$	27,452		5.3	%	$	84,034	$	82,278		2.1	%

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	For the Three Months Ended
	September 30, 2020								September 30, 2019								Total % Change
	Industrial		Flex		Office		Total		Industrial		Flex		Office		Total		Total % Change
Cash rental income ^{(1) (2)}
Northern California	$	21,170	$	2,291	$	3,071	$	26,532	$	20,648	$	2,519	$	3,058	$	26,225		1.2	%
Southern California		8,859		4,643		203		13,705		8,704		4,844		205		13,753		(0.3	%)
Dallas		2,947		5,329		—		8,276		3,057		5,296		—		8,353		(0.9	%)
Austin		2,077		6,190		—		8,267		2,122		5,552		—		7,674		7.7	%
Northern Virginia		1,862		6,150		9,671		17,683		1,756		6,360		10,123		18,239		(3.0	%)
South Florida		10,445		426		42		10,913		10,334		497		45		10,876		0.3	%
Seattle		2,956		1,785		128		4,869		2,581		1,567		185		4,333		12.4	%
Suburban Maryland		1,042		—		3,809		4,851		1,071		—		3,864		4,935		(1.7	%)

Total		51,358		26,814		16,924		95,096		50,273		26,635		17,480		94,388		0.8	%

Adjusted cost of operations ⁽¹⁾
Northern California		5,046		648		794		6,488		4,839		666		832		6,337		2.4	%
Southern California		2,501		1,336		91		3,928		2,215		1,341		76		3,632		8.1	%
Dallas		1,024		1,835		—		2,859		933		2,047		—		2,980		(4.1	%)
Austin		787		2,333		—		3,120		713		2,131		—		2,844		9.7	%
Northern Virginia		513		1,898		3,596		6,007		493		1,823		3,628		5,944		1.1	%
South Florida		3,143		154		20		3,317		2,734		158		22		2,914		13.8	%
Seattle		868		424		66		1,358		616		370		50		1,036		31.1	%
Suburban Maryland		363		—		1,463		1,826		370		—		1,395		1,765		3.5	%

Total		14,245		8,628		6,030		28,903		12,913		8,536		6,003		27,452		5.3	%

Cash NOI ⁽¹⁾
Northern California		16,124		1,643		2,277		20,044		15,809		1,853		2,226		19,888		0.8	%
Southern California		6,358		3,307		112		9,777		6,489		3,503		129		10,121		(3.4	%)
Dallas		1,923		3,494		—		5,417		2,124		3,249		—		5,373		0.8	%
Austin		1,290		3,857		—		5,147		1,409		3,421		—		4,830		6.6	%
Northern Virginia		1,349		4,252		6,075		11,676		1,263		4,537		6,495		12,295		(5.0	%)
South Florida		7,302		272		22		7,596		7,600		339		23		7,962		(4.6	%)
Seattle		2,088		1,361		62		3,511		1,965		1,197		135		3,297		6.5	%
Suburban Maryland		679		—		2,346		3,025		701		—		2,469		3,170		(4.6	%)

Total	$	37,113	$	18,186	$	10,894	$	66,193	$	37,360	$	18,099	$	11,477	$	66,936		(1.1	%)

⁽¹⁾	Refer to page 27, Definitions and Non-GAAP Disclosures, for the definitions of Same Park, Cash Rental Income, Adjusted Cost of Operations, and Cash NOI.

⁽²⁾

Included in the calculation of Cash rental income is (a) lease buyout income of $0.3 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively, (b) accounts receivable write-offs of $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively. Cash rental income does not include deferred or abated rental income, which totaled $2.0 million and $0 for the three months ended September 30, 2020 and 2019, respectively.

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	For the Nine Months Ended
	September 30, 2020								September 30, 2019									Total % Change
	Industrial		Flex		Office		Total		Industrial		Flex		Office			Total		Total % Change
Cash rental income ^{(1) (2)}
Northern California	$	62,515	$	6,967	$	9,251	$	78,733	$	62,481	$	7,414	$	9,016		$	78,911		(0.2	%)
Southern California		25,573		13,887		591		40,051		26,188		14,130		573			40,891		(2.1	%)
Dallas		8,809		16,012		—		24,821		9,253		15,868		—			25,121		(1.2	%)
Austin		6,062		18,231		—		24,293		6,303		16,549		—			22,852		6.3	%
Northern Virginia		5,549		18,073		29,030		52,652		5,300		18,888		30,942			55,130		(4.5	%)
South Florida		30,832		1,373		99		32,304		30,944		1,423		71			32,438		(0.4	%)
Seattle		8,776		5,136		475		14,387		7,514		4,697		548			12,759		12.8	%
Suburban Maryland		3,067		—		11,863		14,930		3,373		—		11,169			14,542		2.7	%

Total		151,183		79,679		51,309		282,171		151,356		78,969		52,319			282,644		(0.2	%)

Adjusted cost of operations ⁽¹⁾
Northern California		14,382		1,986		2,338		18,706		13,811		1,976		2,380			18,167		3.0	%
Southern California		6,898		3,858		246		11,002		6,652		3,796		221			10,669		3.1	%
Dallas		3,013		6,087		—		9,100		2,830		5,988		—			8,818		3.2	%
Austin		2,268		6,774		—		9,042		2,153		6,301		—			8,454		7.0	%
Northern Virginia		1,548		5,550		10,873		17,971		1,572		5,550		11,808			18,930		(5.1	%)
South Florida		8,806		412		51		9,269		8,264		454		81			8,799		5.3	%
Seattle		2,412		1,225		169		3,806		1,785		1,126		149			3,060		24.4	%
Suburban Maryland		1,032		—		4,106		5,138		1,070		—		4,311			5,381		(4.5	%)

Total		40,359		25,892		17,783		84,034		38,137		25,191		18,950			82,278		2.1	%

Cash NOI ⁽¹⁾
Northern California		48,133		4,981		6,913		60,027		48,670		5,438		6,636			60,744		(1.2	%)
Southern California		18,675		10,029		345		29,049		19,536		10,334		352			30,222		(3.9	%)
Dallas		5,796		9,925		—		15,721		6,423		9,880		—			16,303		(3.6	%)
Austin		3,794		11,457		—		15,251		4,150		10,248		—			14,398		5.9	%
Northern Virginia		4,001		12,523		18,157		34,681		3,728		13,338		19,134			36,200		(4.2	%)
South Florida		22,026		961		48		23,035		22,680		969		(10	)		23,639		(2.6	%)
Seattle		6,364		3,911		306		10,581		5,729		3,571		399			9,699		9.1	%
Suburban Maryland		2,035		—		7,757		9,792		2,303		—		6,858			9,161		6.9	%

Total	$	110,824	$	53,787	$	33,526	$	198,137	$	113,219	$	53,778	$	33,369		$	200,366		(1.1	%)

⁽¹⁾	Refer to page 27, Definitions and Non-GAAP Disclosures, for the definitions of Same Park, Cash Rental Income, Adjusted Cost of Operations, and Cash NOI.

⁽²⁾

Included in the calculation of Cash rental income is (a) lease buyout income of $0.8 million and $1.1 million for the nine months ended September 30, 2020 and 2019, respectively, (b) accounts receivable write-offs of $1.4 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively. Cash rental income does not include deferred or abated rental income, which totaled $6.5 million and $0 for the nine months ended September 30, 2020 and 2019, respectively.

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	For the Nine Months Ended September 30,
	2020			2019
Commercial recurring capital expenditures ⁽¹⁾
Same Park
Capital improvements	$	6,389		$	5,899
Tenant improvements		10,632			10,330
Lease commissions		4,939			5,430

Total Same Park recurring capital expenditures		21,960			21,659
Non-Same Park
Capital improvements		24			60
Tenant improvements		391			1,369
Lease commissions		286			340

Total Non-Same Park recurring capital expenditures		701			1,769

Total recurring capital expenditures		22,661			23,428
Assets sold recurring capital expenditures		16			813

Total commercial recurring capital expenditures		22,677			24,241
Non-recurring property renovations ⁽¹⁾		512			2,011
Multifamily capital expenditures		—			20

Total capital expenditures	$	23,189		$	26,272


Same Park recurring capital expenditures as a percentage of NOI		10.8	%		10.7	%

⁽¹⁾	Refer to page 27, Definitions and Non-GAAP Disclosures, for the definitions of Recurring Capital Expenditures and Non-recurring Property Renovations.

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	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Net income allocable to common shareholders	$	30,580	$	26,312	$	97,717	$	81,212
Adjustments
Gain on sale of real estate facilities		(7,652)		-		(27,273)		-
Depreciation and amortization		23,064		26,220		72,646		75,863
Net income allocable to noncontrolling interests		8,124		7,020		26,011		21,670
Net income allocable to restricted stock unit holders		149		219		543		699
FFO allocated to joint venture partner		(21)		(39)		(102)		(105)

FFO allocable to diluted common shares and units ⁽¹⁾		54,244		59,732		169,542		179,339
Non-capitalizable demolition costs		335		-		335		-
Acceleration of stock compensation expense due to President and Chief Executive Officer retirement		1,687		-		1,687		-

Core FFO allocable to diluted common shares and units ⁽¹⁾		56,266		59,732		171,564		179,339

Adjustments
Recurring capital improvements		(1,625)		(2,567)		(6,413)		(5,979)
Tenant improvements		(3,338)		(3,238)		(11,023)		(11,699)
Capitalized lease commissions		(1,889)		(2,626)		(5,225)		(5,770)
Total recurring capital expenditures for assets sold		-		(282)		(16)		(813)
Non-cash rental income ⁽²⁾		(1,530)		(1,122)		(5,340)		(3,069)
Non-cash stock compensation expense ⁽³⁾		831		2,102		2,704		3,991
Cash paid for taxes in lieu of shares upon vesting of restricted stock units		(442)		(620)		(4,102)		(6,120)

FAD allocable to diluted common shares and units ⁽¹⁾		48,273		51,379		142,149		149,880
Distributions to common shareholders		(28,860)		(28,805)		(86,533)		(86,343)
Distributions to noncontrolling interests - common units		(7,671)		(7,671)		(23,012)		(23,012)
Distributions to restricted stock unit holders		(140)		(219)		(469)		(699)
Distributions to noncontrolling interests - joint venture		(46)		(33)		(109)		(78)

Free cash available after fixed charges		11,556		14,651		32,026		39,748
Non-recurring property renovations ⁽¹⁾		(299)		(56)		(512)		(2,011)
Investment in multifamily development		(2,971)		(1,597)		(5,094)		(2,590)
Investment in industrial development		(2,971)		(283)		(5,843)		(283)

Retained cash ⁽¹⁾	$	5,315	$	12,715	$	20,577	$	34,864


Weighted average outstanding
Common shares		27,483		27,432		27,470		27,411
Operating partnership units		7,305		7,305		7,305		7,305
Restricted stock units		49		113		65		126
Common share equivalents		82		111		90		101

Total diluted common shares and units		34,919		34,961		34,930		34,943


FFO per share	$	1.55	$	1.71	$	4.85	$	5.13
Core FFO per share	$	1.61	$	1.71	$	4.91	$	5.13
FAD distribution payout ratio ⁽⁴⁾		76.1%		71.5%		77.5%		73.5%

⁽¹⁾	Refer to page 27, Definitions and Non-GAAP Disclosures, for the definition of FFO, Core FFO, FAD, Non-Recurring Property Renovations and Retained Cash.

⁽²⁾	Non-cash rental income includes amortization of deferred rent receivable (net of write-offs), in-place lease intangible, tenant improvement reimbursement, and lease incentive intangible.

⁽³⁾	Amounts shown are net of accelerated stock compensation expense related to the President and Chief Executive Officer retirement, which is also excluded from the computation of Core FFO.

⁽⁴⁾	FAD distribution payout ratio is equal to total distributions to common shareholders, unit holders, restricted stock unit holders and our joint venture partner divided by FAD during the same reporting period.

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	As of September 30, 2020						As of December 31, 2019
			% of Total						% of Total
			Market		WTD Average				Market		WTD Average
	Total		Capitalization		Rate		Total		Capitalization		Rate

Unsecured Debt:
$250.0 million unsecured credit facility (LIBOR + 0.825%)	$	-		-		-	$	-		-		-

Total unsecured debt	$	-		-		-	$	-		-		-


Preferred Equity:
5.200% Series W preferred stock (7,590,000 depositary shares outstanding) callable 10/20/21	$	189,750		3.7%			$	189,750		2.8%
5.250% Series X preferred stock (9,200,000 depositary shares outstanding) callable 9/21/22		230,000		4.4%				230,000		3.5%
5.200% Series Y preferred stock (8,000,000 depositary shares outstanding) callable 12/7/22		200,000		3.8%				200,000		3.0%
4.875% Series Z preferred stock (13,000,000 depositary shares outstanding) callable 11/4/24		325,000		6.3%				325,000		4.9%

Total preferred equity	$	944,750		18.2%		5.10%	$	944,750		14.2%		5.10%



Total debt and preferred equity	$	944,750		18.2%		5.10%	$	944,750		14.2%		5.10%


Common stock (27,486,788 and 27,440,953 shares outstanding as of September 30, 2020 and December 31, 2019, respectively) ⁽¹⁾	$	3,364,108		64.6%			$	4,524,190		67.8%
Common operating partnership units (7,305,355 units outstanding as of September 30, 2020 and December 31,2019)⁽¹⁾		894,102		17.2%				1,204,434		18.0%

Total common equity ⁽¹⁾	$	4,258,210		81.8%			$	5,728,624		85.8%


Total market capitalization	$	5,202,960		100.0%			$	6,673,374		100.0%


	For the nine months ended September 30, 2020						For the year ended December 31, 2019
Interest expense and related expenses ⁽²⁾	$	410					$	611
Preferred distributions		36,139						54,346

Total fixed charges and preferred distributions	$	36,549					$	54,957


Ratio of EBITDAre to fixed charges and preferred distributions		5.6x						5.3x
Ratio of FFO to total fixed charges and preferred distributions ⁽³⁾		5.6x						5.3x
Ratio of debt and preferred Equity to EBITDAre ⁽⁴⁾		3.4x						3.3x

⁽¹⁾

Total common equity is calculated as the total number of common stock and operating partnership units outstanding multiplied by the Company’s closing share price at the end of each respective period shown. Closing share prices on September 30, 2020 and December 31, 2019 were $122.39 and $164.87, respectively.

⁽²⁾	Interest expense and related expenses includes facility fees associated with our unsecured credit facility.

⁽³⁾	Ratio of FFO to total fixed charges and preferred distributions is calculated by dividing FFO excluding fixed charges and preferred distributions by total fixed charges and preferred distributions.

⁽⁴⁾	Ratio of debt and preferred equity to EBITDAre is calculated as total debt and preferred equity divided by EBITDAre. Ratio of debt and preferred equity to EBITDAre as of September 30, 2020 is calculated using annualized EBITDAre for the nine months ended September 30, 2020.

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Industry Concentration as of September 30, 2020 ⁽¹⁾

					Percentage of
					Total Rental Income
Business services						19.6%
Warehouse, distribution, transportation and logistics						12.9%
Computer hardware, software and related services						11.3%
Retail, food, and automotive						9.1%
Engineering and construction						8.0%
Health services						7.8%
Government						6.1%
Electronics						3.1%
Insurance and financial services						2.7%
Home furnishings						2.6%
Communications						1.9%
Aerospace/defense products and services						1.8%
Educational services						1.0%
Other						12.1%

Total						100.0%


Top 10 Customers by Total Annual Rental Income as of September 30, 2020

Customer	Square Footage		Annualized Rental Income ⁽²⁾		Percentage of Total Annualized Rental Income

US Government		521,000	$	13,170		3.2%
Amazon Inc.		501,000		6,173		1.5%
Luminex Corporation		199,000		4,382		1.1%
KZ Kitchen Cabinet & Stone		221,000		3,490		0.8%
ECS Federal, LLC		134,000		2,942		0.7%
Lockheed Martin Corporation		124,000		2,635		0.6%
Applied Materials, Inc.		162,000		2,356		0.6%
CentralColo, LLC		96,000		2,356		0.6%
Carbel, LLC		236,000		2,213		0.5%
Costco		180,000		1,949		0.5%

Total		2,374,000	$	41,666		10.1%


Tenant Composition as of September 30, 2020

					Average Tenant Size
			Number		(in square feet)
			of Tenants		Average square footage
Large Tenant Portfolio ⁽³⁾				1,372		12,691
Small Tenant Portfolio ⁽⁴⁾				3,609		2,140

Total Portfolio				4,981		5,046

⁽¹⁾	Industry concentration is categorized based on customers’ Standard Industrial Classification Code.

⁽²⁾	For leases expiring within one year, annualized rental income includes only the income to be received under the existing lease from October 1, 2020 through the respective date of expiration.

⁽³⁾	Large tenant portfolio consists of properties with average leases greater than or equal to 5,000 square feet.

⁽⁴⁾	Small tenant portfolio consists of properties with average leases less than 5,000 square feet.

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Annualized Revenue per Occupied Square Foot ^{(1) (2)}
	For the Three Months						For the Nine Months Ended
	Ended September 30,						Ended September 30,
Region	2020		2019		% Change		2020		2019		% Change

Northern California	$	16.43	$	15.11		8.7%	$	16.30	$	15.15		7.6	%
Southern California	$	17.73	$	17.77		(0.2%)	$	17.42	$	17.52		(0.6	%)
Dallas	$	13.04	$	12.81		1.8%	$	12.98	$	12.75		1.8	%
Austin	$	17.99	$	17.14		5.0%	$	17.79	$	17.22		3.3	%
Northern Virginia	$	19.66	$	19.83		(0.9%)	$	19.66	$	20.02		(1.8	%)
South Florida	$	12.28	$	11.90		3.2%	$	12.04	$	11.78		2.2	%
Seattle	$	15.34	$	13.31		15.3%	$	14.69	$	13.09		12.2	%
Suburban Maryland	$	19.24	$	19.34		(0.5%)	$	19.19	$	19.39		(1.0	%)
Total	$	16.29	$	15.66		4.0%	$	16.11	$	15.64		3.0	%


Annualized Revenue per Available Foot (RevPAF) ^{(1) (2)}
	For the Three Months							For the Nine Months Ended
	Ended September 30,							Ended September 30,
Region	2020		2019		% Change			2020		2019		% Change

Northern California	$	15.08	$	14.67		2.8	%	$	14.90	$	14.61		2.0	%
Southern California	$	16.78	$	16.89		(0.7	%)	$	16.53	$	16.66		(0.8	%)
Dallas	$	11.48	$	11.73		(2.1	%)	$	11.60	$	11.76		(1.4	%)
Austin	$	17.00	$	15.67		8.5	%	$	16.85	$	15.69		7.4	%
Northern Virginia	$	18.25	$	18.71		(2.5	%)	$	18.21	$	18.88		(3.5	%)
South Florida	$	11.40	$	11.38		0.2	%	$	11.20	$	11.25		(0.4	%)
Seattle	$	14.40	$	12.69		13.5	%	$	14.21	$	12.49		13.8	%
Suburban Maryland	$	17.26	$	17.28		(0.1	%)	$	17.31	$	17.27		0.2	%
Total	$	15.03	$	14.83		1.3	%	$	14.90	$	14.79		0.7	%


Annualized Revenue per Occupied Square Foot ^{(1) (2)}
	For the Three Months							For the Nine Months Ended
	Ended September 30,							Ended September 30,

Product Type	2020		2019		% Change			2020		2019		% Change

Industrial	$	13.78	$	12.95		6.4	%	$	13.55	$	12.93		4.8	%
Flex	$	19.10	$	18.74		1.9	%	$	18.98	$	18.63		1.9	%
Office	$	24.12	$	24.43		(1.3	%)	$	24.05	$	24.58		(2.2	%)
Total	$	16.29	$	15.66		4.0	%	$	16.11	$	15.64		3.0	%


Annualized Revenue per Available Foot (RevPAF) ^{(1) (2)}
	For the Three Months							For the Nine Months Ended
	Ended September 30,							Ended September 30,
Product Type	2020		2019		% Change			2020		2019		% Change

Industrial	$	12.77	$	12.41		2.9	%	$	12.57	$	12.38		1.5	%
Flex	$	17.59	$	17.43		0.9	%	$	17.52	$	17.23		1.7	%
Office	$	21.89	$	22.49		(2.7	%)	$	22.05	$	22.68		(2.8	%)
Total	$	15.03	$	14.83		1.3	%	$	14.90	$	14.79		0.7	%

⁽¹⁾	Refer to page 27, Definitions and Non-GAAP Disclosures, for the definitions of Same Park, Revenue per Occupied Square Foot and Revenue per Available Square Foot.

⁽²⁾

Included in the calculation of revenue per occupied square foot and RevPAF is (a) lease buyout income of $0.3 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively, and $0.8 million and $1.1 million for the nine months ended September 30, 2020 and 2019, respectively, (b) accounts receivable write-offs of $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively, and $1.4 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively, and (c) deferred rent receivable write-offs of $0.3 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $2.6 million and $0.4 million for the nine months ended September 30, 2020 and 2019, respectively.

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Rentable Square Footage of Same Park Properties by Product Type as of September 30, 2020
Markets	Industrial			Flex			Office			Total			% of Total

Northern Virginia		507			1,440			1,970			3,917			15.3	%
South Florida		3,728			126			12			3,866			15.1	%
Silicon Valley		3,094			367			-			3,461			13.5	%
East Bay		3,297			53			-			3,350			13.1	%
Dallas		1,300			1,587			-			2,887			11.2	%
Austin		755			1,208			-			1,963			7.6	%
Los Angeles County		1,256			317			31			1,604			6.2	%
Seattle		1,052			270			28			1,350			5.3	%
Suburban Maryland		394			-			751			1,145			4.5	%
Orange County		810			101			-			911			3.5	%
San Diego County		233			535			-			768			3.0	%
Mid-Peninsula		-			94			340			434			1.7	%

Total		16,426			6,098			3,132			25,656			100.0	%

Percentage by Product Type		64.0	%		23.8	%		12.2	%		100.0	%

Same Park Weighted Average Occupancy Rates by Product Type for the Three Months Ended September 30, 2020

Markets				Industrial			Flex			Office			Total

Northern Virginia					95.2%			95.9%			89.9%			92.8%
South Florida					93.2%			80.0%			100.0%			92.8%
Silicon Valley					96.4%			90.2%			-			95.7%
East Bay					88.0%			90.2%			-			88.0%
Dallas					90.4%			86.1%			-			88.0%
Austin					94.5%			94.4%			-			94.5%
Los Angeles County					95.6%			93.1%			99.1%			95.2%
Seattle					93.8%			97.5%			60.8%			93.8%
Suburban Maryland					83.5%			-			92.6%			89.5%
Orange County					92.3%			95.4%			-			92.6%
San Diego County					98.4%			95.4%			-			96.3%
Mid-Peninsula					-			88.0%			91.2%			90.5%
Total					92.7%			92.1%			90.6%			92.3%

Same Park Weighted Average Occupancy Rates by Product Type for the Nine Months Ended September 30, 2020

Markets				Industrial			Flex			Office			Total

Northern Virginia					94.4%			94.8%			90.5%			92.6%
South Florida					93.3%			84.3%			100.0%			93.1%
Silicon Valley					96.4%			90.5%			-			95.8%
East Bay					86.7%			92.4%			-			86.8%
Dallas					91.8%			87.3%			-			89.3%
Austin					95.6%			94.1%			-			94.6%
Los Angeles County					95.2%			95.8%			99.1%			95.4%
Seattle					97.0%			97.0%			81.9%			96.7%
Suburban Maryland					83.4%			-			93.5%			90.0%
Orange County					93.0%			93.1%			-			93.0%
San Diego County					97.4%			95.6%			-			96.1%
Mid-Peninsula					-			86.8%			93.2%			91.8%
Total					92.8%			92.3%			91.5%			92.5%

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Rentable Square Footage of Same Park Properties by Size as of September 30, 2020 ⁽¹⁾

Markets	Large Tenant			Small Tenant			Total

Northern Virginia		2,479			1,438			3,917
South Florida		3,107			759			3,866
Silicon Valley		2,835			626			3,461
East Bay		3,052			298			3,350
Dallas		1,758			1,129			2,887
Austin		1,718			245			1,963
Los Angeles County		712			892			1,604
Seattle		951			399			1,350
Suburban Maryland		537			608			1,145
Orange County		513			398			911
San Diego County		-			768			768
Mid-Peninsula		-			434			434

Total		17,662			7,994			25,656

Percentage by Size		68.8	%		31.2	%		100.0	%

Same Park Weighted Average Occupancy Rates by Size for the Three Months Ended September 30, 2020 ⁽¹⁾

Markets	Large Tenant			Small Tenant			Total

Northern Virginia		91.7	%		94.6	%		92.8	%
South Florida		92.5	%		94.0	%		92.8	%
Silicon Valley		96.2	%		93.2	%		95.7	%
East Bay		87.0	%		98.3	%		88.0	%
Dallas		90.5	%		84.1	%		88.0	%
Austin		95.2	%		89.6	%		94.5	%
Los Angeles County		97.8	%		93.0	%		95.2	%
Seattle		93.7	%		94.1	%		93.8	%
Suburban Maryland		87.4	%		91.3	%		89.5	%
Orange County		91.1	%		94.6	%		92.6	%
San Diego County		-			96.3	%		96.3	%
Mid-Peninsula		-			90.5	%		90.5	%
Total		92.2	%		92.4	%		92.3	%

Same Park Weighted Average Occupancy Rates by Size for the Nine Months Ended September 30, 2020 ⁽¹⁾

Markets	Large Tenant			Small Tenant			Total

Northern Virginia		91.5	%		94.3	%		92.6	%
South Florida		93.0	%		93.4	%		93.1	%
Silicon Valley		96.3	%		93.3	%		95.8	%
East Bay		85.7	%		98.7	%		86.8	%
Dallas		91.6	%		85.7	%		89.3	%
Austin		95.4	%		89.3	%		94.6	%
Los Angeles County		97.5	%		93.8	%		95.4	%
Seattle		97.0	%		95.9	%		96.7	%
Suburban Maryland		89.4	%		90.5	%		90.0	%
Orange County		92.1	%		94.2	%		93.0	%
San Diego County		-			96.1	%		96.1	%
Mid-Peninsula		-			91.8	%		91.8	%
Total		92.4	%		92.7	%		92.5	%

⁽¹⁾	The Company’s “large tenant” portfolio consists of properties with average leases greater than or equal to 5,000 square feet while the “small tenant” portfolio consists of properties with average leases less than 5,000 square feet.

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Rentable Square Footage of Properties by Product Type as of September 30, 2020

Markets	Industrial			Flex			Office			Total			% of Total

Northern Virginia		1,564			1,440			1,970			4,974			18.1	%
South Florida		3,728			126			12			3,866			14.1	%
Silicon Valley		3,094			446			-			3,540			12.9	%
East Bay		3,297			53			-			3,350			12.2	%
Dallas		1,300			1,587			-			2,887			10.5	%
Los Angeles County		1,946			317			31			2,294			8.3	%
Austin		755			1,208			-			1,963			7.1	%
Seattle		1,052			270			28			1,350			4.9	%
Suburban Maryland		394			-			751			1,145			4.2	%
Orange County		810			101			-			911			3.3	%
San Diego County		233			535			-			768			2.8	%
Mid-Peninsula		-			94			340			434			1.6	%

Total		18,173			6,177			3,132			27,482			100.0	%

Percentage by Product Type		66.1	%		22.5	%		11.4	%		100.0	%

Weighted Average Occupancy Rates by Product Type for the Three Months Ended September 30, 2020

Markets				Industrial			Flex			Office			Total

Northern Virginia					93.5	%		95.9	%		89.9	%		92.8	%
South Florida					93.2	%		80.0	%		100.0	%		92.8	%
Silicon Valley					96.4	%		89.5	%		-			95.5	%
East Bay					88.0	%		90.2	%		-			88.0	%
Dallas					90.4	%		86.1	%		-			88.0	%
Los Angeles County					80.0	%		93.1	%		99.1	%		82.1	%
Austin					94.5	%		94.4	%		-			94.5	%
Seattle					93.8	%		97.5	%		60.8	%		93.8	%
Suburban Maryland					83.5	%		-			92.6	%		89.5	%
Orange County					92.3	%		95.4	%		-			92.6	%
San Diego County					98.4	%		95.4	%		-			96.3	%
Mid-Peninsula					-			88.0	%		91.2	%		90.5	%
Total					91.1	%		92.0	%		90.6	%		91.2	%

Weighted Average Occupancy Rates by Product Type for the Nine Months Ended September 30, 2020

Markets				Industrial			Flex			Office			Total

Northern Virginia					91.7	%		94.8	%		90.5	%		92.1	%
South Florida					93.3	%		84.3	%		100.0	%		93.1	%
Silicon Valley					96.4	%		90.1	%		-			95.6	%
East Bay					86.7	%		92.4	%		-			86.8	%
Dallas					91.8	%		87.3	%		-			89.3	%
Los Angeles County					87.5	%		95.8	%		99.1	%		88.8	%
Austin					95.6	%		94.1	%		-			94.6	%
Seattle					97.0	%		97.0	%		81.9	%		96.7	%
Suburban Maryland					83.4	%		-			93.5	%		90.0	%
Orange County					93.0	%		93.1	%		-			93.0	%
San Diego County					97.4	%		95.6	%		-			96.1	%
Mid-Peninsula					-			86.8	%		93.2	%		91.8	%
Total					91.9	%		92.2	%		91.5	%		91.9	%

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Rentable Square Footage of Properties by Size as of September 30, 2020 ⁽¹⁾

Markets	Large			Small			Total

Northern Virginia		3,399			1,575			4,974
South Florida		3,107			759			3,866
Silicon Valley		2,835			705			3,540
East Bay		3,052			298			3,350
Dallas		1,758			1,129			2,887
Los Angeles County		1,255			1,039			2,294
Austin		1,718			245			1,963
Seattle		951			399			1,350
Suburban Maryland		537			608			1,145
Orange County		513			398			911
San Diego County		-			768			768
Mid-Peninsula		-			434			434

Total		19,125			8,357			27,482

Percentage by Size		69.6	%		30.4	%		100.0	%

Weighted Average Occupancy Rates by Size for the Three Months Ended September 30, 2020 ⁽¹⁾

Markets	Large Tenant			Small Tenant			Total

Northern Virginia		91.8	%		94.9	%		92.8	%
South Florida		92.5	%		94.0	%		92.8	%
Silicon Valley		96.2	%		92.4	%		95.5	%
East Bay		87.0	%		98.3	%		88.0	%
Dallas		90.5	%		84.1	%		88.0	%
Los Angeles County		72.5	%		93.6	%		82.1	%
Austin		95.2	%		89.6	%		94.5	%
Seattle		93.7	%		94.1	%		93.8	%
Suburban Maryland		87.4	%		91.3	%		89.5	%
Orange County		91.1	%		94.6	%		92.6	%
San Diego County		-			96.3	%		96.3	%
Mid-Peninsula		-			90.5	%		90.5	%
Total		90.7	%		92.6	%		91.2	%

Weighted Average Occupancy Rates by Size for the Nine Months Ended September 30, 2020 ⁽¹⁾

Markets	Large Tenant			Small Tenant			Total

Northern Virginia		91.0	%		94.4	%		92.1	%
South Florida		93.0	%		93.4	%		93.1	%
Silicon Valley		96.3	%		92.8	%		95.6	%
East Bay		85.7	%		98.7	%		86.8	%
Dallas		91.6	%		85.7	%		89.3	%
Los Angeles County		84.3	%		94.2	%		88.8	%
Austin		95.4	%		89.3	%		94.6	%
Seattle		97.0	%		95.9	%		96.7	%
Suburban Maryland		89.4	%		90.5	%		90.0	%
Orange County		92.1	%		94.2	%		93.0	%
San Diego County		-			96.1	%		96.1	%
Mid-Peninsula		-			91.8	%		91.8	%
Total		91.6	%		92.8	%		91.9	%

⁽¹⁾	The Company’s “large tenant” portfolio consists of properties with average leases greater than or equal to 5,000 square feet while the “small tenant” portfolio consists of properties with average leases less than 5,000 square feet.

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Lease Expirations - Total Portfolio
			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		% Total		Rental Income

2020		1,458	$	24,767		5.6%		5.6%
2021		5,486		93,627		21.3%		21.3%
2022		5,538		97,801		22.3%		22.3%
2023		4,499		73,758		16.8%		16.8%
2024		2,920		51,668		11.8%		11.8%
Thereafter		5,521		97,800		22.2%		22.2%

Total		25,422	$	439,421		100.0%		100.0%


Lease Expirations - Industrial

			Annualized		% of		% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		Industrial		Rental Income

2020		921	$	12,393		5.0%		2.8%
2021		3,426		49,384		19.9%		11.2%
2022		3,449		50,361		20.3%		11.5%
2023		3,228		45,726		18.5%		10.4%
2024		1,941		29,343		11.8%		6.7%
Thereafter		3,971		60,653		24.5%		13.8%

Total		16,936	$	247,860		100.0%		56.4%


Lease Expirations - Flex
			Annualized		% of		% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		Flex		Rental Income

2020		344	$	6,450		5.5%		1.5%
2021		1,435		28,454		24.4%		6.5%
2022		1,459		29,998		25.8%		6.8%
2023		735		14,368		12.3%		3.3%
2024		635		13,265		11.4%		3.0%
Thereafter		1,064		23,944		20.6%		5.4%

Total		5,672	$	116,479		100.0%		26.5%


Lease Expirations - Office
			Annualized		% of		% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		Office		Rental Income

2020		193	$	5,924		7.9%		1.3%
2021		625		15,789		21.0%		3.6%
2022		630		17,442		23.2%		4.0%
2023		536		13,664		18.2%		3.1%
2024		344		9,060		12.1%		2.1%
Thereafter		486		13,203		17.6%		3.0%

Total		2,814	$	75,082		100.0%		17.1%

⁽¹⁾	Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-leasing of expiring spaces.

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Lease Expirations - Northern California

			Annualized		% of		% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		No. CA		Rental Income

2020		324	$	8,558		7.1%		2.0%
2021		1,254		23,208		19.2%		5.3%
2022		1,137		20,399		16.8%		4.6%
2023		1,119		19,946		16.5%		4.6%
2024		835		14,547		12.0%		3.3%
Thereafter		2,049		34,417		28.4%		7.8%

Total		6,718	$	121,075		100.0%		27.6%


Lease Expirations - Southern California

			Annualized		% of		% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		So. CA		Rental Income

2020		251	$	4,590		6.5%		1.0%
2021		897		17,169		24.5%		3.9%
2022		1,117		20,386		29.1%		4.7%
2023		512		9,704		13.9%		2.2%
2024		328		6,933		9.9%		1.6%
Thereafter		662		11,251		16.1%		2.5%

Total		3,767	$	70,033		100.0%		15.9%


Lease Expirations - Dallas

			Annualized		% of		% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		Dallas		Rental Income

2020		172	$	2,607		7.7%		0.6%
2021		728		9,567		28.2%		2.2%
2022		405		4,900		14.4%		1.1%
2023		518		6,189		18.2%		1.4%
2024		231		3,732		11.0%		0.9%
Thereafter		435		6,963		20.5%		1.6%

Total		2,489	$	33,958		100.0%		7.8%


Lease Expirations - Austin

			Annualized		% of		% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		Austin		Rental Income

2020		36	$	446		1.3%		0.1%
2021		366		6,509		18.2%		1.5%
2022		403		7,401		20.7%		1.7%
2023		232		4,372		12.2%		1.0%
2024		228		4,829		13.5%		1.1%
Thereafter		618		12,169		34.1%		2.8%

Total		1,883	$	35,726		100.0%		8.2%

⁽¹⁾	Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-leasing of expiring spaces.

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Lease Expirations - Northern Virginia

			Annualized		% of		% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		No. VA		Rental Income

2020		283	$	4,481		4.8%		1.0%
2021		954		17,855		19.4%		4.0%
2022		1,251		26,429		28.7%		6.0%
2023		613		12,228		13.3%		2.8%
2024		532		10,606		11.5%		2.4%
Thereafter		1,014		20,536		22.3%		4.7%

Total		4,647	$	92,135		100.0%		20.9%


Lease Expirations - South Florida

			Annualized		% of		% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		So. FL		Rental Income

2020		280	$	2,414		5.3%		0.6%
2021		843		10,701		23.5%		2.4%
2022		842		10,985		24.2%		2.5%
2023		864		10,743		23.6%		2.4%
2024		521		6,636		14.6%		1.5%
Thereafter		310		4,002		8.8%		0.9%

Total		3,660	$	45,481		100.0%		10.3%


Lease Expirations - Suburban Maryland

			Annualized		% of		% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		Sub. MD		Rental Income

2020		35	$	582		2.7%		0.1%
2021		216		3,933		18.5%		0.9%
2022		156		3,086		14.6%		0.7%
2023		256		5,618		26.5%		1.3%
2024		110		2,435		11.5%		0.6%
Thereafter		237		5,547		26.2%		1.2%

Total		1,010	$	21,201		100.0%		4.8%


Lease Expirations - Seattle

			Annualized		% of		% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		Seattle		Rental Income

2020		77	$	1,089		5.5%		0.2%
2021		228		4,685		23.7%		1.1%
2022		227		4,215		21.3%		1.0%
2023		385		4,958		25.0%		1.1%
2024		135		1,950		9.8%		0.4%
Thereafter		196		2,915		14.7%		0.7%

Total		1,248	$	19,812		100.0%		4.5%

⁽¹⁾	Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-leasing of expiring spaces.

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Lease Expirations - Large Tenant Portfolio ⁽¹⁾

			Annualized		% of		% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽²⁾		Large Tenant		Rental Income

2020		745	$	10,902		3.9%		2.5%
2021		3,050		45,296		16.2%		10.3%
2022		3,494		56,176		20.1%		12.8%
2023		3,161		46,208		16.6%		10.5%
2024		2,370		38,887		14.0%		8.9%
Thereafter		4,852		81,258		29.2%		18.5%

Total		17,672	$	278,727		100.0%		63.5%


Lease Expirations - Small Tenant Portfolio ⁽³⁾

			Annualized		% of		% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽²⁾		Small Tenant		Rental Income

2020		713	$	13,865		8.6%		3.1%
2021		2,436		48,331		30.1%		11.0%
2022		2,044		41,625		25.9%		9.5%
2023		1,338		27,550		17.1%		6.3%
2024		550		12,781		8.0%		2.9%
Thereafter		669		16,542		10.3%		3.7%

Total		7,750	$	160,694		100.0%		36.5%

⁽¹⁾	Large tenant portfolio consists of properties with average leases greater than or equal to 5,000 square feet.

⁽²⁾	Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-leasing of expiring spaces.

⁽³⁾	Small tenant portfolio consists of properties with average leases less than 5,000 square feet.

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	Total Portfolio Activity ⁽¹⁾
	Wtd. Avg.						Leasing				Customer						Transaction Costs				Transaction Costs						Cash Rental Rate
	Occupancy						Volume				Retention						per Executed Foot				as a % of Rents ⁽²⁾						Change ⁽²⁾ ⁽³⁾
	QTD			YTD			QTD		YTD		QTD			YTD			QTD		YTD		QTD			YTD			QTD			YTD

Northern Virginia		92.8	%		92.1	%		334,000		970,000		73.7	%		73.9	%	$	3.34	$	4.50		9.1	%		10.2	%		-4.2	%		-1.9	%

South Florida		92.8	%		93.1	%		279,000		827,000		57.5	%		52.6	%	$	1.46	$	1.16		6.4	%		4.4	%		0.3	%		0.8	%

Silicon Valley		95.5	%		95.6	%		218,000		682,000		62.6	%		68.9	%	$	1.33	$	2.41		2.1	%		3.5	%		11.8	%		13.3	%

East Bay		88.0	%		86.8	%		71,000		472,000		71.0	%		65.1	%	$	0.63	$	2.00		1.6	%		4.4	%		-2.6	%		15.8	%

Dallas		88.0	%		89.3	%		186,000		560,000		46.4	%		50.8	%	$	1.68	$	2.57		6.6	%		9.9	%		0.9	%		2.4	%

Suburban Maryland		89.5	%		90.0	%		42,000		126,000		27.8	%		43.3	%	$	6.40	$	7.16		10.6	%		11.0	%		-2.0	%		-0.2	%

Austin		94.5	%		94.6	%		138,000		312,000		94.0	%		71.3	%	$	2.93	$	3.44		7.5	%		9.7	%		3.1	%		1.7	%

Los Angeles		82.1	%		88.8	%		471,000		794,000		83.4	%		45.4	%	$	7.60	$	5.49		10.1	%		9.5	%		21.8	%		16.7	%

Seattle		93.8	%		96.7	%		46,000		354,000		51.9	%		74.9	%	$	1.33	$	0.82		3.9	%		2.6	%		5.4	%		20.6	%

Orange County		92.6	%		93.0	%		78,000		233,000		68.3	%		55.2	%	$	2.47	$	2.51		3.2	%		4.0	%		-1.0	%		0.0	%

San Diego		96.3	%		96.1	%		73,000		225,000		73.1	%		67.7	%	$	1.07	$	1.44		3.7	%		4.9	%		-0.1	%		-0.5	%

Mid-Peninsula		90.5	%		91.8	%		25,000		71,000		57.9	%		65.2	%	$	1.18	$	0.63		2.5	%		1.3	%		3.3	%		3.6	%

Company Totals by Market		91.2	%		91.9	%		1,961,000		5,626,000		64.0	%		60.7	%	$	3.46	$	3.01		7.2	%		6.8	%		5.2	%		5.9	%

Industrial		91.1	%		91.9	%		1,398,000		3,839,000		68.6	%		59.4	%	$	3.57	$	2.40		7.3	%		5.5	%		9.3	%		9.8	%

Flex		92.0	%		92.2	%		436,000		1,344,000		61.3	%		66.2	%	$	2.46	$	3.46		6.0	%		8.4	%		-0.5	%		1.3	%

Office		90.6	%		91.5	%		127,000		443,000		48.1	%		55.1	%	$	5.69	$	6.90		9.0	%		11.0	%		-3.6	%		-1.6	%

Company Totals by Type		91.2	%		91.9	%		1,961,000		5,626,000		64.0	%		60.7	%	$	3.46	$	3.01		7.2	%		6.8	%		5.2	%		5.9	%

⁽¹⁾	Average lease term for leases executed during the quarter- and year-to-date periods ended September 30, 2020 was 4.3 years and 3.8 years, respectively.

⁽²⁾	Refer to page 27, Definitions and Non-GAAP Disclosures, for the definitions of Transaction Costs as a Percentage of Rents, Cash Rental Rate Change, and Average Net Effective Rent Growth.

⁽³⁾	Average Net Effective Rent Growth for leases executed during the quarter- and year-to-date periods ended September 30, 2020 was 18.7% and 16.4%, respectively.

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Provided within this supplemental information package are measures not defined in accordance with U.S. generally accepted accounting principles (“GAAP”). We believe our presentation of these non-GAAP measures assists investors and analysts in analyzing and comparing our operating and financial performance between reporting periods. These non-GAAP measures discussed below are not substitutes of other measures of financial performance presented in accordance with GAAP. In addition, other real estate investment trusts (“REITs”) may compute these measures differently, so comparisons among REITs may not be helpful.

Adjusted Cost of Operations – Adjusted cost of operations represents cost of operations, excluding non-cash stock compensation expense for employees whose compensation expense is recorded in cost of operations, which can vary significantly period to period based upon the performance of the Company. The GAAP measure most directly comparable to adjusted cost of operations is cost of operations.

Average Net Effective Rent Growth – Average net effective rent growth represents the weighted average percentage change in net effective rents for leases executed during a period compared against the prior leases for the same units. Net effective rent represents average rental payments for the term of a lease on a straight-line basis, excluding operating expense reimbursements

Cash NOI – We utilize cash NOI to evaluate the cash flow performance of our business parks. Cash NOI represents NOI adjusted to exclude non-cash items included in rental income and in cost of operations. The non-cash rental income includes amortization of deferred rent receivable (net of write-offs), in-place lease intangible, tenant improvement reimbursement, and lease incentive intangible. The non-cash expense is equal to stock compensation expense for employees whose compensation expense is recorded in cost of operations. We believe that cash NOI assists investors in analyzing cash flow performance of our business parks. The GAAP measure most directly comparable to cash NOI is net income.

Cash Rental Income – Cash rental income represents rental income, excluding non-cash rental income, specifically amortization of deferred rent receivable (net of write-offs), in-place lease intangible, tenant improvement reimbursement, and lease incentive intangible.

Cash Rental Rate Change – Cash rental rate change percentages are computed by taking the percentage difference between outgoing rents (including estimated expense recoveries) and incoming rents (including estimated expense recoveries) for leases executed during the period. Leases executed on spaces vacant for more than the preceding twelve months have been excluded.

Core FFO and Core FFO per share – Core FFO represents FFO excluding the net impact of (i) income allocated to preferred shareholders to the extent redemption value exceeds the related carrying value and (ii) other nonrecurring income or expense items as appropriate. Core FFO per share represents Core FFO allocable to diluted shares and units divided by the weighted average diluted shares and units. We believe our presentation of Core FFO and Core FFO per share assists investors and analysts in analyzing and comparing our operating and financial performance between reporting periods. The GAAP measures most directly comparable to Core FFO and Core FFO per share are net income and earnings per share, respectively.

Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) – EBITDAre is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and is often utilized to evaluate the performance of real estate companies. EBITDAre is calculated as GAAP net income before interest, depreciation and amortization and adjusted to exclude gains or losses from sales of depreciable real estate assets and impairment charges on real estate assets. We believe our presentation of EBITDAre assists investors and analysts in evaluating the operating performance of our business activities, including the impact of general and administrative expenses, and without the impact from gains or losses from sales of depreciable real estate assets. The GAAP measure most directly comparable EBITDAre is net income.

Free Cash Available after Fixed Charges – Free cash available after fixed charges represents FAD less dividends and distributions.

Funds Available for Distribution (“FAD”) – FAD is a non-GAAP measure that represents Core FFO adjusted to (a) deduct recurring capital improvements that maintains the condition of our real estate, tenant improvements and lease commissions and (b) remove certain non-cash rental income or expenses such as amortization of deferred rent receivable and non-cash stock compensation expense. We believe our presentation of FAD assists investors and analysts in analyzing and comparing our operating and financial performance between reporting periods. FAD is not a substitute for GAAP net cash flow in evaluating our liquidity or ability to pay dividends, because they exclude investing and financing activities presented on our statements of cash flows. The GAAP measure most directly comparable to FAD is operating cash flow from our statements of cash flows.

Funds from Operations (“FFO”) and FFO per share – FFO and FFO per share are non-GAAP measures defined by NAREIT and are considered helpful measures of REIT performance by REITs and many REIT analysts. FFO represents GAAP net income before real estate depreciation and amortization expense, gains or losses on sales of operating properties and land and impairment charges on real estate assets, which are excluded because it does not accurately reflect changes in the value of our business parks. FFO per share represents FFO allocable to diluted shares and units, divided by aggregate diluted shares and units. The GAAP measure most directly comparable to FFO and FFO per share are net income and earnings per share, respectively.

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Net Operating Income (“NOI”) – We utilize NOI, a non-GAAP financial measure, to evaluate the operating performance of our business parks. We define NOI as rental income less adjusted cost of operations (described below). We believe NOI assists investors in analyzing the performance and value of our business parks by excluding (i) corporate overhead (i.e. general and administrative expenses) because it does not relate to the results of our business parks, (ii) depreciation and amortization expense because it does not accurately reflect changes in the fair value of our business parks and (iii) stock compensation expense because this expense item can vary significantly from period to period and thus impact comparability across periods. The GAAP measure most directly comparable to NOI is net income.

Non-Recurring Property Renovations – Non-recurring property renovations represents renovations that substantially enhance the value of a property, including capitalized costs associated with repositioning acquired assets.

Non-Same Park – Non-Same Park includes assets acquired on or subsequent to January 1, 2018.

Recurring Capital Expenditures – Recurring capital expenditures are capitalized costs necessary to continue to operate the property at its current economic value. Capital improvements in excess of $2,000 with a useful life greater than 24 months are capitalized. Lease transaction costs (i.e. tenant improvements and leasing commissions) of $1,000 or more for leases with terms greater than 12 months are capitalized. All leasing costs, including first generation tenant improvements and leasing commissions, are included in recurring capital expenditures.

Retained Cash – Retained cash represents free cash available after fixed charges less non-recurring property renovations and funds used for development and redevelopment.

Revenue per Available Square Foot (RevPAF) – RevPAF is computed by dividing rental income for the period by weighted average available square feet for the same period. RevPAF for the three and nine month periods is annualized.

Revenue per Occupied Square Foot – Revenue per occupied square foot is computed by dividing rental income for the period by weighted average occupied square feet for the same period. Revenue per occupied square foot for the three and nine month periods is annualized.

Same Park – Same Park includes assets acquired prior to January 1, 2018.

Transaction Costs as a Percentage of Rents – Transaction costs as a percentage of rents are computed by taking the total transaction costs divided by the total rents (including estimated expense recoveries) over the term of the lease.

PS Business Parks (PSBXP) 8-KResults of Operations and Financial Condition