NEWS RELEASE
WRIT Washington Real Estate Investment Trust
CONTACT: 6110 Executive Boulevard Listed: NYSE
Marie Donohue Suite 800 Trading Symbol: WRE
Executive Assistant Rockville, MD 20852 Newspaper Quote: WRIT
Direct Dial: 301-255-0802 Tel 301-984-9400 www.writ.com
E-Mail: mdonohue@writ.com Fax 301-984-9610 ------------
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FOR IMMEDIATE RELEASE February 21, 2002
Page 1 of 8
WASHINGTON REAL ESTATE INVESTMENT TRUST
2001 EPS Up 9.5%, FFO Per Share Up 9.5%
Washington Real Estate Investment Trust (WRIT) reported the following results
today:
2001 2000 % Change
---- ---- --------
Earnings Per Share $ 1.38 $ 1.26 9.5%
Funds from Operations Per Share $ 1.96 $ 1.79 9.5%
Funds Available for Distribution Per Share $ 1.55 $ 1.24 25.0%
(Details regarding the above amounts are contained in the following pages. All
amounts are fully diluted per share amounts.)
Edmund B. Cronin, Jr. Chairman, President and CEO, stated, "Though the economy
continues to weaken WRIT has been able to weather the storm and produce
relatively strong growth." He also noted, "WRIT has no off balance sheet
investments or commitments for real estate, high technology or any other type of
venture. Furthermore, WRIT is not exposed to any speculative development risks."
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 58 properties consisting of 10
retail centers, 23 office properties, 16 industrial and 9 multifamily
properties.
WRIT's streak of 36 consecutive years of increased earnings per share and 29
consecutive FFO per share growth spans 4 recessions. WRITS's dividends have
increased every year for 32 consecutive years. During these 32 years, WRIT's
dividends have increased 36 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 included, 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, the timing and
pricing of lease transactions and changes in general and local economic and real
estate market conditions.
FOR IMMEDIATE RELEASE
Page 2 of 8
WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
Quarter Ended December 31, Twelve Months Ended December 31,
OPERATING RESULTS 2001 2000 2001 2000
- ----------------------------------------------- ---------- ---------- ----------- ----------
Real estate rental revenue $ 37,807 $ 35,211 $ 148,424 $ 134,732
Real estate expenses (10,343) (9,636) (42,147) (38,316)
----------- ------------ ------------- -------------
27,464 25,575 106,277 96,416
Real estate depreciation and amortization (7,041) (5,833) (26,735) (22,723)
----------- ------------ ------------- -------------
Income from real estate 20,423 19,742 79,542 73,693
Other income 435 264 1,686 943
Interest expense (6,893) (6,735) (27,071) (25,531)
General and administrative (1,559) (1,774) (6,100) (7,533)
----------- ------------ ------------- -------------
Income before gain on sale of real estate 12,406 11,497 48,057 41,572
Gain on sale of real estate - - 4,296 3,567
----------- ------------ ------------- -------------
Net Income 12,406 11,497 52,353 45,139
=========== ============ ============= =============
Gain on Sale of Real Estate - - (4,296) (3,567)
Divestiture Sharing Distribution - - (537) -
Real estate depreciation and amortization 7,041 5,833 26,735 22,723
----------- ------------ ------------- -------------
Funds From Operations 19,447 17,330 74,255 64,295
=========== ============ ============= =============
Tenant Improvements (578) (1,323) (3,186) (6,342)
Recurring Capital Improvements (2,676) (2,156) (7,011) (7,402)
Leasing Commissions Capitalized (306) (330) (1,001) (2,087)
Acquisition Capital Improvements (1,547) (570) (3,528) (1,950)
Expansions (794) - (794) (1,147)
Straight Line Rents, Net of Reserve (550) (670) (2,352) (2,469)
Non Real Estate Depreciation & Amortization 449 436 1,789 1,723
Divestiture Sharing Distribution - - 537 -
----------- ------------ ------------- -------------
Funds Available for Distribution $ 13,445 $ $12,717 $ 58,709 $ 44,621
=========== ============ ============= =============
Per Share Data
- ---------------
Income before gain on real estate (Basic) $0.32 $0.32 $1.28 $1.16
(Diluted) $0.32 $0.32 $1.27 $1.16
Net Income (Basic) $0.32 $0.32 $1.39 $1.26
(Diluted) $0.32 $0.32 $1.38 $1.26
Funds From Operations (Basic) $0.50 $0.48 $1.97 $1.80
(Diluted) $0.50 $0.48 $1.96 $1.79
Funds Available for Distribution (Basic) $0.35 $0.36 $1.56 $1.25
(Diluted) $0.34 $0.35 $1.55 $1.24
Dividends paid $0.3325 $0.3125 $1.3100 $1.2300
Weighted average shares outstanding 38,748,217 35,736,723 37,673,693 35,734,530
Fully diluted weighted average shares outstanding 39,056,824 36,027,658 37,950,613 35,872,366
Washington Real Estate Investment Trust
Q4 2001 Supplemental Disclosures
Page 3 of 8
WASHINGTON REAL ESTATE INVESTMENT TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
December 31, December 31,
2001 2000
------------ ------------
Assets
Real estate, at cost $774,586 $698,513
Accumulated depreciation (122,625) (100,906)
------------ ------------
Total investment in real estate, net 651,961 597,607
Cash and cash equivalents 26,441 6,426
Rents and other receivables, net of allowance for doubtful
accounts of $1,993 and $1,743, respectively 10,523 9,795
Prepaid expenses and other assets 19,010 19,587
------------ ------------
Total Assets $707,935 $633,415
============ ============
Liabilities
Accounts payable and other liabilities $13,239 $13,048
Advance rents 3,604 3,269
Tenant security deposits 6,148 5,624
Mortgage notes payable 94,726 86,260
Notes payable 265,000 265,000
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Total Liabilities 382,717 373,201
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Minority interest 1,611 1,558
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Shareholders' Equity
Shares of beneficial interest, $.01 par value; 100,000
shares authorized: 38,829 and 35,740 shares issued
and outstanding, respectively 388 357
Additional paid-in capital 323,219 258,299
------------ ------------
Total Shareholders' Equity 323,607 258,656
------------ ------------
Total Liabilities and Shareholders' Equity $707,935 $633,415
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Washington Real Estate Investment Trust
Q4 2001 Supplemental Disclosures
Page 4 of 8
WRIT's FFO Per Share Growth has averaged 230 basis points greater than the REIT
- -------------------------------------------------------------------------------
Industry average over the last 5 quarters
- -----------------------------------------
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
outperform the industry.
WRIT REIT INDUSTRY*
---- -------------
Q4 2000 6.7% 7.5%
Q1 2000 11.9% 6.9%
Q2 2001 11.4% 5.7%
Q3 2001 8.7% 5.1%
Q4 2001 4.2% N/A
Average 8.6% 6.3%
* REIT industry data for Q4 2000 - Q3 2001 is actual FFO per share growth per
Credit Suisse First Boston Equity REIT Research. Q4 2001 industry date is not
yet available and, therefore, the industry average is the average over Q4 2000 -
Q3 2001.
Core Portfolio Operating Income (NOI) Growth and Rental Rate Growth - Q4 2001
- -----------------------------------------------------------------------------
vs. Q4 2000
- -----------
Including Straight Line Rents Excluding Straight Line Rents
----------------------------- -----------------------------
Rental Rate Rental Rate
Sector NOI Growth Growth NOI Growth Growth
------ ---------- ------ ---------- ------
Multifamily 0.6% 5.9% 0.6% 5.9%
Office Buildings 2.7% 4.7% 3.8% 6.3%
Retail Centers 5.9% 12.0% 4.8% 11.8%
Industrial Centers 2.9% 0.5% 1.7% 0.5%
---- ---- ---- ----
Overall Core Portfolio 2.8% 5.3% 3.0% 6.1%
Core portfolio operating expenses increased 1.8% in Q4 2001 vs Q4 2000.
Washington Real Estate Investment Trust
Q4 2001 Supplemental Disclosures
Page 5 of 8
Core Portfolio & Overall Occupancy Levels by Sector
- ---------------------------------------------------
Core Portfolio All Properties
-------------- --------------
4th QTR 4th QTR 4th QTR 4th QTR
Sector 2001 2000 2001 2000
---- ---- ---- ----
Multifamily 93.7% 96.1% 93.7% 96.1%
Office Buildings 96.0% 97.7% 96.4% 97.5%
Retail Centers 96.3% 97.3% 96.3% 97.3%
Industrial Centers 95.6% 98.1% 96.0% 98.1%
----- ----- ----- -----
Overall Portfolio 95.5% 97.4% 95.8% 97.3%
WRIT's Core Portfolio NOI Growth has averaged 110 basis points greater than the
- -------------------------------------------------------------------------------
REIT Industry average over the last 5 quarters
- ----------------------------------------------
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 outperform the industry.
WRIT REIT INDUSTRY*
---- -------------
Q4 2000 8.2% 6.8%
Q1 2001 8.7% 6.1%
Q2 2001 8.2% 5.9%
Q3 2001 6.5% 4.3%
Q4 2001 2.8% N/A
Average 6.9% 5.8%
*REIT Industry Same Store NOI growth data is per Salomon Smith Barney Equity
REIT Research. Q4 2001 industry data is not yet available and, therefore, the
industry average is the average over Q4 2000-Q3 2001.
Washington Real Estate Investment Trust
Q4 Supplemental Disclosures
Page 6 of 8
Straight-line Rents
- -------------------
The following disclosure is provided to improve comparability between Q4 2001
and prior quarters (all amounts except per share amounts are in $000's):
Including Straight Line Rents Excluding Straight Line Rents
----------------------------- -----------------------------
4th QTR 4th QTR 4th QTR 4th QTR
2001 2000 2001 2000
---- ---- ---- ----
Straight Line Rent, Net $ 550 $ 670 N/A N/A
FFO $ 19,447 $ 17,330 $ 18,897 $ 16,660
FFO Per Share $ 0.498 $ 0.481 $ 0.484 $ 0.462
FFO Per Share Growth - Nominal 3.51% 4.63%
FFO Per Share Growth - Rounded 4.17% 4.35%
Core Portfolio Operating Income
(NOI) Growth 2.8% 3.0%
Q4 2001 Commercial Leasing Activity
- -----------------------------------
In Q4 2001, WRIT executed leases for 362,000 square feet of commercial space at
a weighted average increase over the prior rent in place of 33.1% on a cash
basis and 40.9% straight-line basis. Details by sector are as follows:
Cash Basis Cash Basis
Previous New Cash Basis Straight-Line
Sector Square Feet Face Rent Face Rent % Increase % Increase
------ ----------- --------- --------- ---------- ----------
Office 189,556 $ 22.76 $ 27.94 22.8% 28.4%
Retail * 66,307 3.75 13.93 271.8% 319.4%
Industrial 106,089 7.94 9.17 15.4% 22.7%
-------- ------- ------- ------- -------
Overall 361,952 $ 14.93 $ 19.87 33.1% 40.9%
Avg Term Avg Tenant
Sector Years Imp/SF
------ ----- ------
Office 5.0 $ 6.96
Retail 14 -
Industrial 2.2 0.23
------- --------
Overall 6.0 $ 3.71
Washington Real Estate Investment Trust
Q4 2001 Supplemental Disclosures
Page 7 of 8
Acquisitions
- ------------
On November 1, 2001 WRIT acquired Sullyfield Commercial Center, a two building
industrial complex in Chantilly, VA for $21.6 million. Sullyfield Commerce
Center contains 248,000 rentable square feet and is 100% leased.
Dispositions
- ------------
There were no dispositions for the quarter ended December 31, 2001.
Capital Improvements Summary
- ----------------------------
During Q4 2001, WRIT invested $5.6 million in real estate capital improvements.
A breakdown of these improvements is as follows (in $000's):
Accretive Capital Improvements
Acquisition Related $ 1,547
Expansions 794
Tenant Improvements 578
----------
Total Accretive Capital Improvements 2,919
Recurring Capital Improvements 2,676
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Total Capital Improvements $ 5,595
Leasing Commissions Capitalized $ 306
December 31, 2001 Debt Summary
- ------------------------------
At December 31, 2001, WRIT's debt was as follows (in $millions):
Weighted Avg Weighted Avg
Amount Maturity (Yrs) Interest Rate
------ -------------- --------------
Secured $ 94.7 5.8 6.8%
Senior Notes & MTN's $ 265.0 8.1 7.4%
-------
Subtotal $ 359.7
Line of Credit* $ - -
------- ------- ------
Total Debt and Total Weighted Average $ 359.7 7.5 7.4%
*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.
Washington Real Estate Investment Trust
Q4 2001 Supplemental Disclosures
Page 8 of 8
Supplemental Debt Information at December 31, 2001
- --------------------------------------------------
Debt to Total Market Capitalization: 27.0%
Earnings to Fixed Charges: 3.67x
Debt Service Coverage Ratio: 3.67x
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 and no
speculative construction in process.
2. WRIT has only one theatre lease in its portfolio. This lease runs
through 6/30/02 at rent that WRIT estimates to be less than 1/3 of
current market rent.
3. WRIT has no capital investments in technology ventures or companies,
nor any other off balance sheet activities.
Conference Call Information
- ---------------------------
WRIT will conduct a Conference Call to discuss 4th Quarter Earnings on Friday,
February 22, 2002 at 11:00 AM, Eastern Time. Conference call access information
is as follows:
USA Toll Free Number: 888-780-9649
International Toll Number: 212-547-0410
Pass Code: Washington REIT
Leader: Sara Grootwassink
The replay of the Conference Call will be available for two weeks, commencing
one hour after the Conference Call and concluding on March 8, 2002 at 5:00 PM
Eastern Time. Instant Replay access information is as follows:
USA Toll Free Number: 800-839-4838
International Toll Number: 402-220-5089
The live on-demand webcast of the Conference Call will also be available on
WRIT's website at www.writ.com. The on-line playback of the webcast will be
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available at www.writ.com for 30 days following the Conference Call.
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