Exhibit
Number
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99.1 Press Release, October 24, 2000, entitled "Supplemental Data"
[LETTERHEAD OF WASHINGTON REAL ESTATE INVESTMENT TRUST]
FOR IMMEDIATE RELEASE October 24, 2000
Page 1 of 7
WASHINGTON REAL ESTATE INVESTMENT TRUST
3/rd/ Quarter 2000 FFO Per Share Up 21%
Washington Real Estate Investment Trust (WRIT) reported today that Funds From
Operations (FFO) per share increased 21.0% to $0.46 in the third quarter of 2000
from $0.38 in the third quarter of 1999. FFO increased 21.3% to $16,534,000 for
the quarter ended September 30, 2000 from $13,631,000 for the quarter ended
September 30, 1999. FFO is the primary performance measure for the REIT
industry.
Edmund B. Cronin, Jr., Chairman, President and CEO, stated that, "WRIT's FFO
growth is due to the excellent performance of recent acquisitions, combined with
the strong core portfolio net operating income increase of 10.4%." WRIT's core
portfolio excludes properties not owned for the entirety of both periods being
compared.
WRIT is a self-administered, self-managed, equity real estate investment trust
investing in income-producing properties in the greater Washington-Baltimore
region. The Trust owns a diversified portfolio of 57 properties consisting of 10
neighborhood retail centers, 23 office buildings, 9 apartment properties and 15
industrial distribution properties.
WRIT's streak of 34 consecutive years of increased earnings per share and 27
consecutive years of increased FFO per share growth spans 4 recessions. WRIT's
dividends have increased every year for 29 consecutive years. During these 29
years, WRIT's dividends have increased 35 times, a record unmatched by any other
publicly traded real estate investment trust. WRIT shares are publicly traded on
the New York Stock Exchange (symbol: WRE).
Certain statements in this press release and the supplemental disclosures
attached hereto are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements involve known
and unknown risks, uncertainties and other factors that may cause actual results
to differ materially. Such risks, uncertainties and other factors include, but
are not limited to, fluctuations in interest rates, availability of raw
materials and labor costs, levels of competition, the effect of government
regulation, the availability of capital, weather conditions and changes in
general and local economic and real estate market conditions.
CONTINUED
FOR IMMEDIATE RELEASE October 24, 2000
Page 2 of 7
WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(in thousands except per share data)
Quarter Ended September 30, Nine Months Ended September 30,
--------------------------- -------------------------------
OPERATING RESULTS 2000 1999 2000 1999
- -------------------------------------------------- ---------------------------------- --------------------------------
Real estate rental revenue $ 34,230 $ 29,566 $ 99,520 $ 86,084
Real estate expenses (9,676) (8,985) (28,679) (26,085)
----------- ----------- ----------- -----------
24,554 20,581 70,841 59,999
Real estate depreciation and amortization (5,810) (4,805) (16,889) (13,900)
----------- ----------- ----------- -----------
Income from real estate $ 18,744 $ 15,776 $ 53,952 $ 46,099
Other income 288 85 679 521
Interest expense (6,394) (5,463) (18,796) (16,070)
General and administrative (1,914) (1,572) (5,757) (4,510)
----------- ----------- ----------- -----------
Income before gain on sale of real estate $ 10,724 $ 8,826 $ 30,078 $ 26,040
Gain on sale of real estate 2,069 0 3,567 7,909
----------- ----------- ----------- -----------
Net Income $ 12,793 $ 8,826 $ 33,645 $ 33,949
=========== =========== =========== ===========
Income before gain on real estate per share
(Basic) $ 0.30 $ 0.25 $ 0.84 $ 0.73
=========== =========== =========== ===========
Income before gain on real estate per share
(Diluted) $ 0.30 $ 0.25 $ 0.84 $ 0.73
=========== =========== =========== ===========
Net income per share (Basic) $ 0.36 $ 0.25 $ 0.94 $ 0.95
=========== =========== =========== ===========
Net income per share (Diluted) $ 0.36 $ 0.25 $ 0.94 $ 0.95
=========== =========== =========== ===========
Income before gain on sale of real estate $ 10,724 $ 8,826 $ 30,078 $ 26,040
Real estate depreciation and amortization 5,810 4,805 16,889 13,900
----------- ----------- ----------- -----------
Funds from operations $ 16,534 $ 13,631 $ 46,967 $ 39,940
=========== =========== =========== ===========
Funds from operations per share
(Basic) $ 0.46 $ 0.38 $ 1.31 $ 1.12
=========== =========== =========== ===========
Funds from operations per share
(Diluted) $ 0.46 $ 0.38 $ 1.31 $ 1.12
=========== =========== =========== ===========
Dividends paid per share $ 0.3125 $ 0.2925 $ 0.9175 $ 0.8651
=========== =========== =========== ===========
Weighted average shares outstanding 35,733,793 35,716,150 35,733,793 35,711,402
Fully diluted weighted average shares 35,931,956 35,722,564 35,829,173 35,725,187
outstanding
As of As of
BALANCE SHEET DATA September 30, 2000 December 31, 1999
- ------------------ ------------------- -----------------
Cash and temporary investments $ 4,250 $ 4,716
Real estate assets, at cost (1) 679,080 661,870
Total assets, at cost (1) 711,388 692,054
Lines of credit payable 40,000 33,000
Mortgage notes payable 86,465 87,038
Notes payable 210,000 210,000
Total liabilities 354,425 349,769
Shareholders' equity 258,231 257,189
Shareholders' equity, at cost (1) 355,409 340,763
(1) At cost means adding back accumulated depreciation
CONTINUED
Washington Real Estate Investment Trust
Q3 2000 Supplemental Disclosures
Page 3 of 7
WRIT Continues to Produce Significantly Higher FFO Per Share Growth Than the
- ----------------------------------------------------------------------------
REIT Industry
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As reflected in the following graph WRIT's FFO per share growth, as compared to
the corresponding quarter in the preceding calendar year, continues to
significantly outperform the industry.
[_] WRIT
[_] REIT Industry**
Q3 1999 Q4 1999 Q1 2000 Q2 2000 Q3 2000 Average
20% 11.8% 13.6% 12.2% 10.6% 15.8% 12.8%
15% 8.2% 8.1% 6.2% 5.9% 7.1%
10%
5%
*WRIT growth is shown excluding accounting change to straight-line rents in Q4
1999. The Q3 2000 straight-lined rents were $0.9 million net of reserves.
**REIT Industry data for Q3 1999 - Q2 2000 is actual FFO per share growth per
DLJ Equity REIT Research. Q3 2000 Industry data is not yet available and
therefore the industry average is the average over Q3 1999 - Q2 2000.
Core Portfolio Operating Income (NOI) Growth, Rental Rate Growth, and Net
- -------------------------------------------------------------------------
Revenue Growth Increase By Sector - Q3 2000 vs. Q3 1999
- -------------------------------------------------------
Rental Rate Net Revenue
Sector NOI Growth Growth Growth
---------- ------ ------
Apartments 11.6% 5.7% 8.0%
Office Buildings 9.7% 6.5% 9.2%
Retail Centers 15.4% 6.1% 10.2%
Industrial/Flex Centers 6.4% 4.4% 8.1%
Overall Core Portfolio 10.4% 6.0% 9.0%
Core portfolio operating expenses increased 5.6% in Q3 2000 vs. Q3 1999.
CONTINUED
Washington Real Estate Investment Trust
Q3 2000 Supplemental Disclosures
Page 4 of 7
Core Portfolio & Overall Occupancy Levels By Sector
- ---------------------------------------------------
Core Portfolio All Properties
--------------------------------------------------------------
3rd QTR 3rd QTR 3rd QTR 3rd QTR
Sector 2000 1999 2000 1999
- ------ ---- ---- ---- ----
Apartments 97.7% 97.4% 97.5% 97.4%
Office Buildings 96.7% 96.5% 97.0% 96.5%
Retail Centers 94.9% 94.0% 94.8% 93.3%
Industrial/Flex Centers 96.3% 94.5% 96.3% 94.5%
Overall Portfolio 96.6% 96.1% 96.7% 96.0%
WRIT Continues to Produce Significantly Higher Core Portfolio NOI Growth Than
- -----------------------------------------------------------------------------
the REIT Industry
- -----------------
As reflected in the following graph WRIT's core portfolio NOI growth, as
compared to the corresponding quarter in the preceding calendar year, continues
to significantly outperform the industry.
[_] WRIT*
[_] REIT Industry**
12% Q3 1999 Q4 1999 Q1 2000 Q2 2000 Q3 2000 Average
8% 6.8% 7.4% 9.3% 7.4% 10.4% 8.3%
4% 5.4% 5.6% 6.2% 6.3% 5.9%
*WRIT growth is shown excluding accounting change to straight-line rents in Q4
1999. The Q3 2000 core portfolio straight lined rents were $0.8 million net of
reserves.
**REIT Industry Same Store NOI growth data is per Salomon Smith Barney Equity
REIT Research. Q3 2000 Industry data is not yet available and therefore the
industry average is the average over Q3 1999 - Q2 2000.
Washington Real Estate Investment Trust
Q3 2000 Supplemental Disclosures
Page 5 of 7
Capital Improvements Summary
- ----------------------------
During Q3 2000, WRIT invested $4.7 million in real estate capital improvements.
A breakdown of these improvements is as follows (in 000's):
Accretive Capital Improvements
Acquisition Related $ 862
Expansions & Major Renovations 8
Tenant Improvements 2,964
------
Total Accretive Capital Improvements 3,834
Recurring Capital Improvements 890
------
Total Capital Improvements $4,724
Leasing Commissions Capitalized $ 623
Q3 2000 Commercial Leasing Activity*
- -------------------------------------
In Q3 2000, WRIT executed leases for 395,000 square feet of commercial space at
a weighted average increase of 17.1% over the prior rent in place on a cash,
i.e., non-straight lined basis. Details by sector are as follows:
------------------------
Previous New
Sector Square Feet Face Rent Face Rent $ Increase % Increase
- ------ ----------- --------- --------- ---------- ----------
Office* 169,676 $22.25 $25.50 $3.25 14.6%
Retail 44,017 $16.99 $20.88 $3.89 22.9%
Industrial/Flex 180,985 $ 6.09 $ 7.40 $1.31 21.5%
------- ------ ------ ----- ----
Overall* 394,678 $14.25 $16.69 $2.44 17.1%
Avg Term Avg Tenant
Sector (Years) Imp/SF
- ------ ------- ------
Office* 5.3 $ 7.94
Retail 6.3 $ 3.54
Industrial/Flex 3.7 $ 2.27
----- -------
Overall* 4.7 $ 4.85
*Excludes a 20,057 s.f. below market option exercise.
Q3 2000 Acquisitions
- --------------------
On August 9, 2000, WRIT acquired the ground lease under its Munson Hill Towers
Apartments for $310,000. This ground lease called for annual payments of $22,600
until 2060. This was the only ground lease to which any of WRIT's properties was
subject.
CONTINUED
Washington Real Estate Investment Trust
Q3 2000 Supplemental Disclosures
Page 6 of 7
Q3 2000 Dispositions
- --------------------
On July 7, 2000, WRIT sold a .725 acre out-parcel previously associated with the
12.02 acre Westminster Shopping Center in Westminster, Maryland for $425,000,
resulting in a gain of approximately $360,000. The Westminster Shopping Center
has been in the WRIT portfolio since 1972. WRIT utilized $310,000 of the
proceeds from this sale in a tax-deferred exchange.
On August 22, 2000, WRIT sold the Clairmont Shopping Center in Salisbury,
Maryland for $3.0 million, resulting in a gain of approximately $1.6 million.
The purchaser was a local developer who owns commercial properties in the
Eastern Maryland and Southern Delaware areas. Built in 1965, the one-story
neighborhood center contains approximately 39,000 square feet of retail space
and had been in the WRIT portfolio since 1976.
This sale was pursuant to our strategic plan to dispose of properties which
do not fit WRIT's long-term objectives. Commencing in 1998, this plan has
resulted in the sale of eight properties for a total of $39.6 million, yielding
a total gain of $18.2 million. Subsequent to the end of the quarter, WRIT
utilized the proceeds of this sale in a tax-deferred exchange.
These sales were pursuant to WRIT's strategic plan to dispose of properties that
do not fit our long-term objectives. Commencing in 1998, this plan has resulted
in the sale of ten properties for a total of $39.6 million, yielding a total
gain of $18.2 million.
Northern Virginia Industrial Park Update
- ----------------------------------------
On May 22, 1998 WRIT acquired the 790,000 square foot Northern Virginia
Industrial Park (NVIP). At acquisition, the property was 83% leased at an
average per square foot rent of $4.25 NNN. Upon acquisition, WRIT reported that
the property had been under-managed and that the market vacancy rate was
approximately 1/2 the project vacancy rate. In addition, WRIT indicated that
market rents for the property, in a well managed condition, would range from
$5.00 to $5.50 NNN, depending on the interior office build-out of the various
spaces.
As of September 30, 2000, i.e., in the 28 months since acquisition, WRIT has
executed leases for 650,000 square feet at a weighted average $5.52 NNN psf.
This average rent is 30% above the average rent in the park at acquisition.
NVIP is 96% leased as of the date hereof.
September 30, 2000 Debt Summary
- -------------------------------
At September 30, 2000, WRIT's debt was as follows (in $millions):
Wtd Avg Wtd Avg
Amount Maturity (Yrs) Interest Rate
------ -------------- -------------
Secured $ 86.5 7.1 7.5%
Senior Notes & MTNs $ 210.0 10.7 7.2%
----------------------------------------
Subtotal $ 296.5 9.6 7.3%
Lines of Credit* $ 40.0 1.8 7.4%
----------------------------------------
Total Debt $ 336.5 8.8 7.3%
*WRIT's Lines of Credit total $75 million of capacity at LIBOR+ 70bp.
No more than $60 million of debt matures in any one year and less than $1
million matures in each year until 2003.
CONTINUED
Washington Real Estate Investment Trust
Q3 2000 Supplemental Disclosures
Page 7 of 7
Supplemental Debt Information at September 30, 2000
- ---------------------------------------------------
Debt to Total Market Capitalization: 31.9%
Earnings to Fixed Charges Ratio: 3.47x
Debt Service Coverage Ratio: 3.47x
REIT Industry Issues
- --------------------
In light of recent issues raised in the REIT industry, WRIT makes the following
disclosures:
1. WRIT has no non-income producing land held for development.
2. WRIT has no current ground up development projects.
3. WRIT has only one theatre lease in its portfolio. This lease runs
through 6/30/01 at rent which WRIT estimates to be less than 1/3 of
current market rent.
Conference Call Information
- ---------------------------
WRIT will conduct a Conference Call to discuss 3rd Quarter Earnings on Tuesday,
October 24, 2000 at 11:00 A.M. Eastern Standard Time. Conference Call access
information is as follows:
USA Toll Free Number: 888-566-5914
International Toll Number: 712-271-0602
Pass Code: Washington REIT
A replay of the Conference Call will be available for two weeks commencing one
hour after the Conference Call concludes until November 6, 2000 at 5:00 P.M.
Eastern Standard Time. Instant Replay access information is as follows:
USA Toll Free Number: 800-964-3773
International Toll Number: 402-998-0868
A live on-demand webcast of the Conference Call will also be available on WRIT's
website at www.writ.com. An on-line playback of the webcast will be available
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at www.writ.com for 30 days following the Conference Call.
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END