Washington Real Estate Investment Trust (“WashREIT” or the
“Company”) (NYSE: WRE), a leading owner and operator of multifamily
and commercial properties in the Washington, DC area, reported
financial and operating results today for the quarter ended March
31, 2021:
Financial Results
- Net loss was
$1.1 million, or $0.02 per diluted share
- NAREIT FFO(1)
was $28.5 million, or $0.34 per diluted share
- Core FFO was
$0.34 per diluted share
First Quarter Operational
Highlights
- Net Operating
Income (NOI)(2) was $42.9 million
- Same-store(3) NOI
declined 6.5% and cash NOI declined 6.0% compared to the first
quarter of 2020, due to decreases in office and multifamily
revenues of 7.8% and 3.8%, respectively, primarily due to the
negative impact of COVID-19, as well as higher multifamily
operating expenses and lower lease termination fees, partially
offset by lower commercial operating expenses
- Collected over 98%
of cash rent from multifamily residents and commercial tenants
- Multifamily net
applications at urban properties increased 49% year-over-year
- Multifamily lease
rates(4) declined 4.8% and 7.4%, on a gross blended and effective
blended basis, respectively
- Signed 154,000
square feet of commercial leases during the quarter
- Office touring and
proposal activity increased in March to the highest level since the
onset of the pandemic in March 2020
Current Operational
Highlights
- Multifamily new
lease rates improved by over 5% thus far in April from March on an
effective basis, and new lease executions with May move-ins
indicate continued improvement
- Current
Multifamily occupancy, excluding the two rent-controlled properties
and Trove, increased 80 basis points from year-end to 95.8%
- Our two
rent-controlled urban properties have experienced recent renewed
strength, which has driven the 30-day occupancy trend for these
properties above 94%, a 440-basis point improvement from 30 days
ago
- Multifamily
leasing concessions at urban properties continue to ease heading
into the spring leasing season
- Trove is
currently 51% leased and remains on track to reach expected
stabilization in the second quarter of 2022
- New office lease
negotiations are on the rise and more tenants are returning to
their office spaces; the total number of office spaces actively
being utilized by tenants increased to over 60%
- Signed
approximately 75,000 square feet of commercial leases thus far in
April
- Commercial tenant
credit performance remains strong and stable year-to-date
Liquidity Position
- Available liquidity
of approximately $670 million as of March 31, 2021 consisting of
the remaining capacity under the Company's $700 million revolving
credit facility and cash on hand
- The Company has no
secured debt and no debt scheduled to mature until the fourth
quarter of 2022
Cash Collections
Multifamily
- Collected over
98% of cash and contractual rent due during the first quarter
- Net deferred
rent(5) associated with multifamily residents was $20,000
Commercial
- Collected 99% of
cash and contractual rent due from office tenants during the first
quarter
- Net deferred
rent associated with office tenants was $0.7 million
- Collected 96% of
cash rent and 97% of contractual rent due from retail tenants
during the first quarter
- Net deferred
rent associated with retail tenants was $0.9 million
"We are pleased with the early signs of recovery
that we are seeing across our multifamily and commercial
portfolios," said Paul T. McDermott, President and CEO. "In
multifamily, we believe improving lease rates and declining
concessions, combined with stable occupancy point toward continued
NOI growth over the course of the year. In commercial, touring and
proposal activity increased during the quarter, renewal activity
has picked up, and collections remain strong. Looking ahead, we
remain focused on optimizing our multifamily pricing, capturing new
commercial leases as confidence and visibility returns, and
pursuing opportunities for transformation led by our
research-driven multifamily investment strategy."
First Quarter Operating
Results
The Company’s first quarter operating results
have a challenging comparison against first quarter 2020 when we
were building significant momentum pre-pandemic. The Company's
overall portfolio NOI was $42.9 million for the quarter ended March
31, 2021 compared to $48.2 million in the corresponding prior year
period. The decrease was primarily driven by the impact of asset
sales during 2020, and lower rental income and higher credit losses
as a result of COVID-19 as the comparative period was minimally
impacted by the pandemic.
Portfolio by Sector:
- Multifamily Same-Store NOI
- Same-store NOI and cash NOI decreased by 9.0% compared
to the corresponding prior year period, which was the best
performing quarter in the last 10 years. Revenue decreased 3.8%,
primarily due to COVID-19 and expenses increased due to snow
removal, the timing of utility expenses, and insurance. At quarter
end, the total operating portfolio, excluding Trove, was 94.9%
occupied and 96.5% leased.
- Office Same-Store
NOI - Same-store NOI decreased by 6.1% and cash NOI
decreased by 4.7% compared to the corresponding prior year period,
primarily due to lower parking income related to COVID-19 and lower
lease termination fees, partially offset by lower operating
expenses. The Office portfolio was 83.3% occupied and 83.6% leased
at quarter end.
-
Other(6)
Same-Store NOI - Same-store NOI and cash NOI
increased by $0.3 million compared to the corresponding prior
year period driven by lower credit losses and higher expense
reimbursements. The Other portfolio was 87.4% occupied and 88.7%
leased at quarter end.
Multifamily Leasing
Activity
- Lease rates declined 4.8% and 7.4%
on a gross blended and effective blended basis, respectively,
during the first quarter. Suburban lease rates declined 0.4% on a
gross blended basis and 1.3% on an effective blended basis, while
urban lease rates declined 7.2% and 10.7% on a gross and effective
blended basis, respectively, during the first quarter.
Commercial Leasing Activity
During the first quarter, WashREIT signed
commercial leases totaling 154,000 square feet, including 29,000
square feet of new leases and 125,000 square feet of renewal
leases, as follows (all dollar amounts are on a per square foot
basis).
|
Square Feet |
Weighted Average Term (in
years) |
Weighted Average Free Rent Period (in
months) |
Weighted Average Rental Rates |
Weighted Average Rental Rate %
Increase |
Tenant Improvements |
Leasing Commissions |
New: |
|
|
|
|
|
|
|
Office |
29,000 |
6.7 |
3.9 |
$58.22 |
4.3% |
$16.01 |
$19.04 |
|
|
|
|
|
|
|
|
Renewal: |
|
|
|
|
|
|
|
Office |
57,000 |
3.6 |
2.1 |
$57.45 |
7.1% |
$1.03 |
$3.16 |
Retail |
68,000 |
5.8 |
0.2 |
$21.81 |
12.6% |
$— |
$1.39 |
Total |
125,000 |
4.8 |
1.5 |
$37.96 |
8.7% |
$0.47 |
$2.19 |
2021 Outlook
The Company is providing Core FFO guidance for
Q2 2021 along with key Q2 2021 assumptions and metrics relating to
such guidance as described below. When it is in a position to do
so, the Company expects to provide full year Core FFO guidance, as
well as its full year outlook on key assumptions and metrics,
consistent with its pre-COVID-19 practice. The Company does not
expect to provide guidance by quarter on an ongoing basis. While
the short-term situation surrounding COVID-19 and the associated
economic impact are fluid, the Company remains focused on
delivering improved results over the long term.
"While we are seeing early signs of recovery
across our multifamily and commercial portfolios, the timing and
pace of the economy reopening remains uncertain, and we are not
ready to forecast, with a sufficient degree of accuracy, the extent
of the recovery over the course of the full year," said Stephen E.
Riffee, Executive Vice President and CFO. "However, we are
providing Core FFO guidance for the second quarter. We plan to
continue to provide periodic updates on our performance while we
monitor the market environment for more visibility regarding the
extent of recovery over the course of the year."
Core FFO for the quarter ending June 30, 2021 is
expected to range from $0.32 to $0.35 per diluted
share(a). The following assumptions are included in the
Core FFO guidance for Q2 2021 set forth above:
|
Q2 2021 |
Same-Store NOI |
|
Multifamily |
$20.5 million - $21.0 million |
Office |
$18.0 million - $18.75 million |
Other |
~ $3.0 million |
(a) Excludes gains or losses on sale of real
estate
Full Year 2021 Outlook
The Company is also providing the following key
assumptions and metrics regarding general and administrative
expense and interest expense for full year 2021. General and
administrative expense is expected to range from $22.5 million to
$23.5 million and interest expense is expected to range from $40.5
million to $41.5 million for the year. Development expenditures are
expected to range from $5.0 to $7.5 million.
This Outlook excludes the impact of any
potential acquisitions or dispositions. This Outlook is based on a
number of factors, many of which are outside the Company's control
and all of which are subject to change. WashREIT may change the
guidance provided during the year as actual and anticipated results
vary from these assumptions, but WashREIT undertakes no obligation
to do so.
Q2 2021 Guidance Reconciliation
Table
A reconciliation of projected net loss per
diluted share to projected Core FFO per diluted share for the
quarter ending June 30, 2021 is as follows:
|
Low |
High |
Net loss per diluted share(a)
|
$ |
(0.03) |
|
$ |
0.00 |
Real estate depreciation and amortization |
0.35 |
0.35 |
NAREIT FFO per diluted share |
0.32 |
0.35 |
Core adjustments |
0.00 |
0.00 |
Core FFO per diluted share
|
$ |
0.32 |
|
$ |
0.35 |
(a) Excludes gains or losses on sale of real
estate
Dividends
On April 5, 2021, WashREIT paid a quarterly
dividend of $0.30 per share.
WashREIT announced today that its Board of
Trustees has declared a quarterly dividend of $0.30 per share to be
paid on July 6, 2021 to shareholders of record on June 23,
2021.
Conference Call Information
The Conference Call for First Quarter 2021
Earnings is scheduled for Thursday, April 29, 2021 at 11:00
A.M. Eastern Time. Conference Call access information is as
follows:
USA Toll Free
Number: |
1-877-407-9205 |
International Toll Number: |
1-201-689-8054 |
The instant replay of the Conference Call will
be available until Thursday, May 13, 2021 at 11:00 P.M. Eastern
Time. Instant replay access information is as follows:
USA Toll
Free Number: |
1-877-481-4010 |
International Toll Number: |
1-919-882-2331 |
Conference ID: |
40266 |
The live on-demand webcast of the Conference
Call will be available on the Investor section of WashREIT's
website at www.washreit.com. Online playback of the webcast will be
available following the Conference Call.
About WashREIT
WashREIT owns and operates uniquely positioned
real estate assets in the Washington Metro area. Backed by decades
of experience, expertise and ambition, we create value by
transforming insights into strategy and strategy into action. As of
April 28, 2021, the Company's portfolio of 43 properties includes
approximately 3.4 million square feet of commercial space and 7,059
multifamily apartment units. These 43 properties consist of 22
multifamily properties, 13 office properties, and 8 retail centers.
Our shares trade on the NYSE. With a track record of driving
returns and delivering satisfaction, we are a trusted authority in
one of the nation's most competitive real estate markets.
Note: WashREIT's press releases and supplemental
financial information are available on the Company website at
www.washreit.com or by contacting Investor Relations at (202)
774-3200.
Certain statements in our earnings release and
on our conference call are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and
involve risks and uncertainties. Forward-looking statements relate
to expectations, beliefs, projections, future plans and strategies,
anticipated events or trends and similar expressions concerning
matters that are not historical facts. In some cases, you can
identify forward looking statements by the use of forward-looking
terminology such as “may,” “will,” “should,” “expects,” “intends,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts,” or
“potential” or the negative of these words and phrases or similar
words or phrases which are predictions of or indicate future events
or trends and which do not relate solely to historical matters.
Such statements involve known and unknown risks, uncertainties, and
other factors which may cause the actual results, performance, or
achievements of WashREIT to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Currently, one of the most significant
factors continues to be the adverse effect of the COVID-19 virus,
including any variants and mutations thereof, the actions taken to
contain the pandemic or mitigate the impact of COVID-19, and the
direct and indirect economic effects of the pandemic and
containment measures. The extent to which COVID-19 continues to
impact WashREIT and its tenants will depend on future developments,
which are highly uncertain and cannot be predicted with confidence,
including the scope, severity and duration of the pandemic, the
actions taken to contain the pandemic or mitigate its impact, and
the direct and indirect economic effects of the pandemic and
containment measures, the continued speed and success of the
vaccine rollout, effectiveness and willingness of people to take
COVID-19 vaccines, and the duration of associated immunity and
their efficacy against emerging variants of COVID-19, among others.
Moreover, investors are cautioned to interpret many of the risks
identified in the risk factors discussed in our Annual Report on
Form 10-K for the year ended December 31, 2020 filed on
February 16, 2021, as being heightened as a result of the
ongoing and numerous adverse impacts of COVID-19. Additional
factors which may cause the actual results, performance, or
achievements of WashREIT to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements include, but are not limited to the
risks associated with ownership of real estate in general and our
real estate assets in particular; the economic health of the
greater Washington metro region; the risk of failure to enter into
and/or complete potential acquisitions and dispositions, at all,
within the price ranges anticipated and on the terms and timing
anticipated; changes in the composition of our portfolio;
fluctuations in interest rates; reductions in or actual or
threatened changes to the timing of federal government spending;
the risks related to use of third-party providers; the economic
health of our tenants; shifts away from brick and mortar stores to
e-commerce; the availability and terms of financing and capital and
the general volatility of securities markets; compliance with
applicable laws, including those concerning the environment and
access by persons with disabilities; the risks related to not
having adequate insurance to cover potential losses; the risks
related to our organizational structure and limitations of stock
ownership; changes in the market value of securities; terrorist
attacks or actions and/or cyber-attacks; failure to qualify and
maintain our qualification as a REIT and the risks of changes in
laws affecting REITs; and other risks and uncertainties detailed
from time to time in our filings with the SEC, including our 2020
Form 10-K filed on February 16, 2021. While forward-looking
statements reflect our good faith beliefs, they are not guarantees
of future performance. We undertake no obligation to update our
forward-looking statements or risk factors to reflect new
information, future events, or otherwise.
This Earnings Release also includes certain
forward-looking non-GAAP information. Due to the high variability
and difficulty in making accurate forecasts and projections of some
of the information excluded from these estimates, together with
some of the excluded information not being ascertainable or
accessible, the Company is unable to quantify certain amounts that
would be required to be included in the most directly comparable
GAAP financial measures without unreasonable efforts.
(1) NAREIT Funds From Operations (“FFO”) is
defined by the National Association of Real Estate Investment
Trusts, Inc. (“NAREIT”) in its NAREIT FFO White Paper - 2018
Restatement as net income (computed in accordance with GAAP)
excluding gains (or losses) associated with sales of properties,
impairments of depreciable real estate, and real estate
depreciation and amortization. We consider NAREIT FFO to be a
standard supplemental measure for equity real estate investment
trusts (“REITs”) because it facilitates an understanding of the
operating performance of our properties without giving effect to
real estate depreciation and amortization, which historically
assumes that the value of real estate assets diminishes predictably
over time. Since real estate values have instead historically risen
or fallen with market conditions, we believe that NAREIT FFO more
accurately provides investors an indication of our ability to incur
and service debt, make capital expenditures and fund other needs.
Our NAREIT FFO may not be comparable to FFO reported by other
REITs. These other REITs may not define the term in accordance with
the current NAREIT definition or may interpret the current NAREIT
definition differently. NAREIT FFO is a non-GAAP measure.
Core Funds From Operations (“Core FFO”) is
calculated by adjusting FFO for the following items (which we
believe are not indicative of the performance of WashREIT's
operating portfolio and affect the comparative measurement of
WashREIT's operating performance over time): (1) gains or losses on
extinguishment of debt, (2) expenses related to acquisition and
structuring activities, (3) executive transition costs, severance
expenses and other expenses related to corporate restructuring and
related to executive retirements or resignations, (4) property
impairments, casualty gains, and gains or losses on sale not
already excluded from FFO, as appropriate, and (5) relocation
expense. These items can vary greatly from period to period,
depending upon the volume of our acquisition activity and debt
retirements, among other factors. We believe that by excluding
these items, Core FFO serves as a useful, supplementary measure of
WashREIT's ability to incur and service debt and to distribute
dividends to its shareholders. Core FFO is a non-GAAP and
non-standardized measure and may be calculated differently by other
REITs.
(2) Net Operating Income (“NOI”), defined as
real estate rental revenue less real estate expenses, is a non-GAAP
measure. NOI is calculated as net income, less non-real estate
revenue and the results of discontinued operations (including the
gain or loss on sale, if any), plus interest expense, depreciation
and amortization, lease origination expenses, general and
administrative expenses, real estate impairment and gain or loss on
extinguishment of debt. We also present NOI on a cash basis ("cash
NOI") which is calculated as NOI less the impact of straight-lining
of rent and amortization of market intangibles. We believe that NOI
and cash NOI are useful performance measures because, when compared
across periods, they reflect the impact on operations of trends in
occupancy rates, rental rates and operating costs on an unleveraged
basis, providing perspective not immediately apparent from net
income. NOI and cash NOI exclude certain components from net income
in order to provide results more closely related to a property’s
results of operations. For example, interest expense is not
necessarily linked to the operating performance of a real estate
asset. In addition, depreciation and amortization, because of
historical cost accounting and useful life estimates, may distort
operating performance at the property level. As a result of the
foregoing, we provide each of NOI and cash NOI as a supplement to
net income, calculated in accordance with GAAP. Neither represents
net income or income from continuing operations, in either case
calculated in accordance with GAAP. As such, NOI and cash NOI
should not be considered alternatives to these measures as an
indication of our operating performance.
(3) For purposes of evaluating comparative
operating performance, we categorize our properties as “same-store”
or “non-same-store”. Same-store properties include properties that
were owned for the entirety of the year being compared, and exclude
properties under redevelopment or development and properties
acquired, sold or classified as held for sale during the year being
compared. We define development properties as those for which we
have planned or ongoing major construction activities on existing
or acquired land pursuant to an authorized development plan. We
consider a property's development activities to be complete when
the property is ready for its intended use. The property is
categorized as same-store when it has been ready for its intended
use for the entirety of the year being compared. We define
redevelopment properties as those for which have planned or ongoing
significant development and construction activities on existing or
acquired buildings pursuant to an authorized plan, which has an
impact on current operating results, occupancy and the ability to
lease space with the intended result of a higher economic return on
the property. We categorize a redevelopment property as same-store
when redevelopment activities have been complete for the majority
of each year being compared.
(4) Lease rate growth is defined as the average
percentage change in gross (excluding the impact of concessions)
and effective rent (net of concessions) for a new or renewed lease
compared to the prior lease based on the move-in date. The blended
rate represents the weighted average of new and renewal lease rate
growth achieved.
(5) Represents total outstanding deferred rent
net of the amount that has been repaid.
(6) Consists of retail centers: Takoma Park,
Westminster, Concord Centre, Chevy Chase Metro Plaza, 800 S.
Washington Street, Randolph Shopping Center, Montrose Shopping
Center and Spring Valley Village.
(7) Funds Available for Distribution (“FAD”) is
a non-GAAP measure. It is calculated by subtracting from FFO (1)
recurring expenditures, tenant improvements and leasing costs, that
are capitalized and amortized and are necessary to maintain our
properties and revenue stream (excluding items contemplated prior
to acquisition or associated with development / redevelopment of a
property) and (2) straight line rents, then adding (3) non-real
estate depreciation and amortization, (4) non-cash fair value
interest expense and (5) amortization of restricted share
compensation, then adding or subtracting the (6) amortization of
lease intangibles, (7) real estate impairment and (8) non-cash
gain/loss on extinguishment of debt, as appropriate. FAD is
included herein, because we consider it to be a performance measure
of a REIT’s ability to incur and service debt and to distribute
dividends to its shareholders. FAD is a non-GAAP and
non-standardized measure, and may be calculated differently by
other REITs.
Ending Occupancy (i)
Levels by Same-Store Properties
(ii) and All Properties |
|
|
|
Ending Occupancy |
|
Same-Store Properties |
|
All Properties |
|
1st QTR |
|
1st QTR |
|
1st QTR |
|
1st QTR |
Segment |
2021 |
|
2020 |
|
2021 |
|
2020 |
Multifamily (iv) |
94.9 |
% |
|
95.1 |
% |
|
94.9 |
% |
|
95.1 |
% |
Office |
83.3 |
% |
|
86.8 |
% |
|
83.3 |
% |
|
88.1 |
% |
Other (iii) |
87.4 |
% |
|
91.1 |
% |
|
87.4 |
% |
|
91.1 |
% |
|
|
|
|
|
|
|
|
Overall Portfolio (iv) |
90.9 |
% |
|
92.4 |
% |
|
90.9 |
% |
|
92.5 |
% |
(i) Ending occupancy is calculated as occupied
square footage or multifamily units as a percentage of total square
footage or total multifamily units, respectively, as of the last
day of that period. The occupied square footage for office and
other properties includes short-term lease agreements.
(ii) Same-store properties include properties
that were owned for the entirety of the years being compared, and
exclude properties under redevelopment or development and
properties acquired, sold or classified as held for sale during the
years being compared. We define development properties as those for
which we have planned or are ongoing major construction activities
on existing or acquired land pursuant to an authorized development
plan. We consider a property's development activities to be
complete when the property is ready for its intended use. The
property is categorized as same-store when it has been ready for
its intended use for the entirety of the years being compared. We
define redevelopment properties as those for which we have planned
or are ongoing significant development and construction activities
on existing or acquired buildings pursuant to an authorized plan,
which has an impact on current operating results, occupancy and the
ability to lease space with the intended result of a higher
economic return on the property. We categorize a redevelopment
property as same-store when redevelopment activities have been
complete for the majority of each year being compared. For Q1 2021
and Q1 2020, same-store properties exclude:
Development:
Multifamily -
Trove
Sold properties:
Office - John
Marshall II, Monument II, and 1227 25th Street NW
(iii) Same-Store Other consists of retail
centers: Takoma Park, Westminster, Concord Centre, Chevy Chase
Metro Plaza, 800 S. Washington Street, Randolph Shopping Center,
Montrose Shopping Center and Spring Valley Village.
(iv) Ending occupancy excludes the addition of
the total rentable units at Trove, which began to lease-up in the
first quarter of 2020. Including Trove, multifamily ending
occupancy was 92.0% and overall portfolio ending occupancy was
89.5% as of March 31, 2021.
WASHINGTON REAL ESTATE INVESTMENT TRUST AND
SUBSIDIARIES |
FINANCIAL HIGHLIGHTS |
(In thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
Three Months Ended March 31, |
OPERATING RESULTS |
2021 |
|
2020 |
Revenue |
|
|
|
Real estate rental revenue |
$ |
69,633 |
|
|
$ |
76,792 |
|
Expenses |
|
|
|
Real estate expenses |
26,694 |
|
|
28,639 |
|
Depreciation and amortization |
29,643 |
|
|
29,720 |
|
General and administrative expenses |
5,604 |
|
|
6,337 |
|
|
61,941 |
|
|
64,696 |
|
|
|
|
|
Real estate operating income |
7,692 |
|
|
12,096 |
|
Other income (expense) |
|
|
|
Interest expense |
(10,123 |
) |
|
(10,845 |
) |
Gain on extinguishment of debt |
— |
|
|
468 |
|
Other income |
1,284 |
|
|
— |
|
|
(8,839 |
) |
|
(10,377 |
) |
|
|
|
|
Net (loss) income |
$ |
(1,147 |
) |
|
$ |
1,719 |
|
|
|
|
|
Net (loss) income |
$ |
(1,147 |
) |
|
$ |
1,719 |
|
Depreciation and amortization |
29,643 |
|
|
29,720 |
|
NAREIT funds from operations (1) |
$ |
28,496 |
|
|
$ |
31,439 |
|
|
|
|
|
Non-cash gain on extinguishment of debt |
$ |
— |
|
|
$ |
(1,381 |
) |
Tenant improvements and incentives, net of reimbursements |
539 |
|
|
(1,072 |
) |
External and internal leasing commissions capitalized |
(538 |
) |
|
(529 |
) |
Recurring capital improvements |
(867 |
) |
|
(988 |
) |
Straight-line rents, net |
(548 |
) |
|
(663 |
) |
Non-cash fair value interest expense |
— |
|
|
(59 |
) |
Non-real estate depreciation & amortization of debt costs |
1,344 |
|
|
942 |
|
Amortization of lease intangibles, net |
377 |
|
|
457 |
|
Amortization and expensing of restricted share and unit
compensation |
1,664 |
|
|
1,778 |
|
Funds available for distribution (7) |
$ |
30,467 |
|
|
$ |
29,924 |
|
|
|
Three Months Ended March 31, |
Per share data: |
|
2021 |
|
2020 |
Net (loss) income |
(Basic) |
$ |
(0.02 |
) |
|
$ |
0.02 |
|
|
(Diluted) |
$ |
(0.02 |
) |
|
$ |
0.02 |
|
NAREIT FFO |
(Basic) |
$ |
0.34 |
|
|
$ |
0.38 |
|
|
(Diluted) |
$ |
0.34 |
|
|
$ |
0.38 |
|
|
|
|
|
|
Dividends paid |
|
$ |
0.30 |
|
|
$ |
0.30 |
|
|
|
|
|
|
Weighted average shares outstanding - basic |
|
84,413 |
|
|
82,086 |
|
Weighted average shares outstanding - diluted |
|
84,413 |
|
|
82,287 |
|
Weighted average shares outstanding - diluted (for NAREIT FFO) |
84,495 |
|
|
82,287 |
|
WASHINGTON REAL ESTATE INVESTMENT TRUST AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(In thousands, except per share data) |
|
|
|
|
|
March 31, 2021 |
|
|
|
(unaudited) |
|
December 31, 2020 |
Assets |
|
|
|
Land |
$ |
551,578 |
|
|
$ |
551,578 |
|
Income producing property |
2,443,104 |
|
|
2,432,039 |
|
|
2,994,682 |
|
|
2,983,617 |
|
Accumulated depreciation and amortization |
(775,691 |
) |
|
(749,014 |
) |
Net income producing property |
2,218,991 |
|
|
2,234,603 |
|
Properties under development or held for future development |
30,840 |
|
|
37,615 |
|
Total real estate held for investment, net |
2,249,831 |
|
|
2,272,218 |
|
Cash and cash equivalents |
3,017 |
|
|
7,700 |
|
Restricted cash |
576 |
|
|
603 |
|
Rents and other receivables |
59,396 |
|
|
58,257 |
|
Prepaid expenses and other assets |
67,216 |
|
|
71,040 |
|
Total assets |
$ |
2,380,036 |
|
|
$ |
2,409,818 |
|
|
|
|
|
Liabilities |
|
|
|
Notes payable, net |
$ |
945,634 |
|
|
$ |
945,370 |
|
Line of credit |
33,000 |
|
|
42,000 |
|
Accounts payable and other liabilities |
60,339 |
|
|
58,773 |
|
Dividend payable |
25,424 |
|
|
25,361 |
|
Advance rents |
6,642 |
|
|
7,215 |
|
Tenant security deposits |
10,095 |
|
|
9,990 |
|
Total liabilities |
1,081,134 |
|
|
1,088,709 |
|
|
|
|
|
Equity |
|
|
|
Shareholders' equity |
|
|
|
Preferred shares; $0.01 par value; 10,000 shares authorized; no
shares issued or outstanding |
— |
|
|
— |
|
Shares of beneficial interest, $0.01 par value; 150,000 and 100,000
shares authorized; 84,564 and 84,409 shares issued and
outstanding, as of March 31, 2021 and December 31, 2020,
respectively |
846 |
|
|
844 |
|
Additional paid in capital |
1,651,680 |
|
|
1,649,366 |
|
Distributions in excess of net income |
(325,469 |
) |
|
(298,860 |
) |
Accumulated other comprehensive loss |
(28,473 |
) |
|
(30,563 |
) |
Total shareholders' equity |
1,298,584 |
|
|
1,320,787 |
|
|
|
|
|
Noncontrolling interests in subsidiaries |
318 |
|
|
322 |
|
Total equity |
1,298,902 |
|
|
1,321,109 |
|
|
|
|
|
Total liabilities and equity |
$ |
2,380,036 |
|
|
$ |
2,409,818 |
|
The following tables contain reconciliations of net (loss) income
to same-store net operating income for the periods presented (in
thousands): |
|
|
|
|
|
|
|
|
Three months ended March 31, 2021 |
Multifamily |
|
Office |
|
Corporate and other |
|
Total |
Same-store net operating income (2) |
$ |
20,751 |
|
|
$ |
18,482 |
|
|
$ |
3,497 |
|
|
$ |
42,730 |
|
Add: Net operating income from non-same-store properties (2) |
209 |
|
|
— |
|
|
— |
|
|
209 |
|
Total net operating income (2) |
$ |
20,960 |
|
|
$ |
18,482 |
|
|
$ |
3,497 |
|
|
$ |
42,939 |
|
Add/(deduct): |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
(29,643 |
) |
General and administrative expenses |
|
|
|
|
|
|
(5,604 |
) |
Interest expense |
|
|
|
|
|
|
(10,123 |
) |
Other income |
|
|
|
|
|
|
1,284 |
|
Net loss |
|
|
|
|
|
|
$ |
(1,147 |
) |
|
|
|
|
|
|
|
|
Three months ended March 31, 2020 |
Multifamily |
|
Office |
|
Corporate and other |
|
Total |
Same-store net operating income (2) |
$ |
22,803 |
|
|
$ |
19,690 |
|
|
$ |
3,207 |
|
|
$ |
45,700 |
|
Add: Net operating (loss) income from non-same-store properties
(2) |
(210 |
) |
|
2,663 |
|
|
— |
|
|
2,453 |
|
Total net operating income (2) |
$ |
22,593 |
|
|
$ |
22,353 |
|
|
$ |
3,207 |
|
|
$ |
48,153 |
|
Add/(deduct): |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
(29,720 |
) |
General and administrative expenses |
|
|
|
|
|
|
(6,337 |
) |
Gain on extinguishment of debt |
|
|
|
|
|
|
468 |
|
Interest expense |
|
|
|
|
|
|
(10,845 |
) |
Net income |
|
|
|
|
|
|
$ |
1,719 |
|
The following table contains a reconciliation of net (loss) income
attributable to the controlling interests to core funds from
operations for the periods presented (in thousands, except per
share data): |
|
|
Three Months Ended March 31, |
|
|
2021 |
|
2020 |
Net (loss) income |
|
$ |
(1,147 |
) |
|
$ |
1,719 |
|
Add: |
|
|
|
|
Real estate depreciation and amortization |
|
29,643 |
|
|
29,720 |
|
NAREIT funds from operations (1) |
|
28,496 |
|
|
31,439 |
|
Add: |
|
|
|
|
Gain on extinguishment of debt |
|
— |
|
|
(468 |
) |
Severance expense |
|
173 |
|
|
— |
|
Core funds from operations (1) |
|
$ |
28,669 |
|
|
$ |
30,971 |
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Per share data: |
|
2021 |
|
2020 |
NAREIT FFO |
(Basic) |
$ |
0.34 |
|
|
$ |
0.38 |
|
|
(Diluted) |
$ |
0.34 |
|
|
$ |
0.38 |
|
Core FFO |
(Basic) |
$ |
0.34 |
|
|
$ |
0.38 |
|
|
(Diluted) |
$ |
0.34 |
|
|
$ |
0.37 |
|
|
|
|
|
|
Weighted average shares outstanding - basic |
|
84,413 |
|
|
82,086 |
|
Weighted average shares outstanding - diluted (for NAREIT and Core
FFO) |
|
84,495 |
|
|
82,287 |
|
CONTACT: |
Steven Freishtat |
Vice President, Finance |
E-Mail: sfreishtat@washreit.com |
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