Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 24, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-6622 | |
Entity Registrant Name | WASHINGTON REAL ESTATE INVESTMENT TRUST | |
Entity Central Index Key | 0000104894 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 53-0261100 | |
Entity Address, Address Line One | 1775 EYE STREET, NW | |
Entity Address, Address Line Two | SUITE 1000 | |
Entity Address, City or Town | WASHINGTON | |
Entity Address, State or Province | DC | |
Entity Address, Postal Zip Code | 20006 | |
City Area Code | 202 | |
Local Phone Number | 774-3200 | |
Title of 12(b) Security | Shares of Beneficial Interest | |
Trading Symbol | WRE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 80,594,744 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Land | $ 611,797 | $ 526,572 |
Income producing property | 2,486,966 | 2,055,349 |
Net income producing property, at cost | 3,098,763 | 2,581,921 |
Accumulated depreciation and amortization | (724,433) | (669,281) |
Net income producing property | 2,374,330 | 1,912,640 |
Properties under development or held for future development | 110,572 | 87,231 |
Total real estate held for investment, net | 2,484,902 | 1,999,871 |
Investment in real estate held for sale, net | 0 | 203,410 |
Cash and cash equivalents | 12,931 | 6,016 |
Restricted cash | 1,578 | 1,624 |
Rents and other receivables | 69,414 | 63,962 |
Prepaid expenses and other assets | 106,251 | 123,670 |
Other assets related to properties held for sale | 0 | 18,551 |
Total assets | 2,675,076 | 2,417,104 |
Liabilities | ||
Notes payable, net | 996,455 | 995,397 |
Mortgage notes payable, net | 47,319 | 48,277 |
Line of credit | 211,000 | 188,000 |
Accounts payable and other liabilities | 75,735 | 57,946 |
Dividend payable | 0 | 24,022 |
Advance rents | 9,475 | 9,965 |
Tenant security deposits | 10,849 | 9,501 |
Other liabilities related to properties held for sale | 0 | 15,518 |
Total liabilities | 1,350,833 | 1,348,626 |
Shareholders’ equity | ||
Preferred shares; $0.01 par value; 10,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Shares of beneficial interest, $0.01 par value; 100,000 shares authorized; 80,292 and 79,910 shares issued and outstanding, as of September 30, 2019 and December 31, 2018, respectively | 803 | 799 |
Additional paid in capital | 1,539,734 | 1,526,574 |
Distributions in excess of net income | (212,978) | (469,085) |
Accumulated other comprehensive (loss) income | (3,659) | 9,839 |
Total shareholders’ equity | 1,323,900 | 1,068,127 |
Noncontrolling interests in subsidiaries | 343 | 351 |
Total equity | 1,324,243 | 1,068,478 |
Total liabilities and equity | $ 2,675,076 | $ 2,417,104 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred shares, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred shares, shares issued (in shares) | 0 | 0 |
Preferred shares, shares outstanding (in shares) | 0 | 0 |
Shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Shares of beneficial interest, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Shares of beneficial interest, shares issued (in shares) | 80,292,000 | 79,910,000 |
Shares of beneficial interest, shares outstanding (in shares) | 80,292,000 | 79,910,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Revenue | |||||
Real estate rental revenue | $ 80,259 | $ 71,001 | $ 228,513 | $ 219,990 | |
Expenses | |||||
Real estate expenses | 30,692 | 25,988 | 84,969 | 79,938 | |
Depreciation and amortization | 37,340 | 27,951 | 97,441 | 83,134 | |
General and administrative expenses | 6,045 | 5,267 | 18,517 | 16,737 | |
Lease origination expenses | 416 | 0 | 1,286 | 0 | |
Real estate impairment | 0 | 0 | 8,374 | 1,886 | |
Expenses | 74,493 | 59,206 | 210,587 | 181,695 | |
(Loss) gain on sale of real estate | 0 | 0 | (1,046) | 2,495 | |
Real estate operating income | 5,766 | 11,795 | 16,880 | 40,790 | |
Other expense | |||||
Interest expense | (14,198) | (12,342) | (41,946) | (38,155) | |
Loss on extinguishment of debt | 0 | 0 | 0 | (1,178) | |
Other expense | (14,198) | (12,342) | (41,946) | (39,333) | |
(Loss) income from continuing operations | (8,432) | (547) | (25,066) | 1,457 | |
Discontinued operations: | |||||
Income from operations of properties sold or held for sale | 2,942 | 6,440 | 16,158 | 18,485 | |
Gain on sale of real estate | 339,024 | 0 | 339,024 | 0 | |
Loss on extinguishment of debt | (764) | 0 | (764) | 0 | |
Income from discontinued operations | 341,202 | 6,440 | 354,418 | 18,485 | |
Net income | 332,770 | 5,893 | 329,352 | 19,942 | |
Less: Net income attributable to noncontrolling interests in subsidiaries | 0 | 0 | 0 | 0 | |
Net income attributable to the controlling interests | $ 332,770 | $ 5,893 | $ 329,352 | $ 19,942 | |
Basic net (loss) income attributable to the controlling interests per share: | |||||
Continuing operations, basic (in dollars per share) | $ (0.10) | $ (0.01) | $ (0.31) | $ 0.01 | |
Discontinued operations, basic (in dollars per share) | 4.24 | 0.08 | 4.41 | 0.23 | |
Basic net income attributable to the controlling interests per common share (in dollars per share) | [1] | 4.14 | 0.07 | 4.10 | 0.25 |
Diluted net (loss) income attributable to the controlling interests per share: | |||||
Continuing operations, diluted (in dollars per share) | (0.10) | (0.01) | (0.31) | 0.01 | |
Discontinued operations, diluted (in dollars per share) | 4.24 | 0.08 | 4.41 | 0.23 | |
Diluted net income attributable to the controlling interests per common share (in dollars per share) | [1] | $ 4.14 | $ 0.07 | $ 4.10 | $ 0.25 |
Weighted average shares outstanding - basic (in shares) | 79,981 | 79,076 | 79,933 | 78,695 | |
Weighted average shares outstanding - diluted (in shares) | 79,981 | 79,076 | 79,933 | 78,802 | |
[1] | Earnings per share may not sum due to rounding |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 332,770 | $ 5,893 | $ 329,352 | $ 19,942 |
Unrealized (loss) gain on interest rate hedges | (2,387) | 1,474 | (13,498) | 7,762 |
Comprehensive income | 330,383 | 7,367 | 315,854 | 27,704 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Comprehensive income attributable to the controlling interests | $ 330,383 | $ 7,367 | $ 315,854 | $ 27,704 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Shares of Beneficial Interest | Additional Paid in Capital | Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | Noncontrolling Interests in Subsidiaries |
Balance (in shares) at Dec. 31, 2017 | 78,510 | ||||||
Balance at Dec. 31, 2017 | $ 1,095,336 | $ 785 | $ 1,483,980 | $ (399,213) | $ 9,419 | $ 1,094,971 | $ 365 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to the controlling interests | 19,942 | 19,942 | 19,942 | ||||
Unrealized gain (loss) on interest rate hedges | 7,762 | 7,762 | 7,762 | ||||
Distributions to noncontrolling interests | (11) | (11) | |||||
Dividends | (71,478) | (71,478) | (71,478) | ||||
Equity issuances, net of issuance costs (in shares) | 1,165 | ||||||
Equity issuances, net of issuance costs | $ 35,472 | $ 11 | 35,461 | 35,472 | |||
Shares issued under dividend reinvestment program (in shares) | 74 | 74 | |||||
Shares issued under dividend reinvestment program | $ 1,811 | $ 1 | 1,810 | 1,811 | |||
Share grants, net of forfeitures and tax withholdings (in shares) | 95 | ||||||
Share grants, net of forfeitures and tax withholdings | 4,875 | $ 1 | 4,874 | 4,875 | |||
Balance (in shares) at Sep. 30, 2018 | 79,844 | ||||||
Balance at Sep. 30, 2018 | 1,093,709 | $ 798 | 1,526,125 | (450,749) | 17,181 | 1,093,355 | 354 |
Balance (in shares) at Jun. 30, 2018 | 78,661 | ||||||
Balance at Jun. 30, 2018 | 1,072,633 | $ 787 | 1,488,366 | (432,585) | 15,707 | 1,072,275 | 358 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to the controlling interests | 5,893 | 5,893 | 5,893 | ||||
Unrealized gain (loss) on interest rate hedges | 1,474 | 1,474 | 1,474 | ||||
Distributions to noncontrolling interests | (4) | (4) | |||||
Dividends | (24,057) | (24,057) | (24,057) | ||||
Equity issuances, net of issuance costs (in shares) | 1,165 | ||||||
Equity issuances, net of issuance costs | $ 35,472 | $ 11 | 35,461 | 35,472 | |||
Shares issued under dividend reinvestment program (in shares) | 18 | 18 | |||||
Shares issued under dividend reinvestment program | $ 565 | $ 0 | 565 | 565 | |||
Share grants, net of forfeitures and tax withholdings (in shares) | 0 | ||||||
Share grants, net of forfeitures and tax withholdings | 1,733 | 1,733 | 1,733 | ||||
Balance (in shares) at Sep. 30, 2018 | 79,844 | ||||||
Balance at Sep. 30, 2018 | 1,093,709 | $ 798 | 1,526,125 | (450,749) | 17,181 | 1,093,355 | 354 |
Balance (in shares) at Dec. 31, 2018 | 79,910 | ||||||
Balance at Dec. 31, 2018 | 1,068,478 | $ 799 | 1,526,574 | (469,085) | 9,839 | 1,068,127 | 351 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to the controlling interests | 329,352 | 329,352 | 329,352 | ||||
Unrealized gain (loss) on interest rate hedges | (13,498) | (13,498) | (13,498) | ||||
Distributions to noncontrolling interests | (8) | (8) | |||||
Dividends | (72,339) | (72,339) | (72,339) | ||||
Equity issuances, net of issuance costs (in shares) | 145 | ||||||
Equity issuances, net of issuance costs | $ 3,681 | $ 2 | 3,679 | 3,681 | |||
Shares issued under dividend reinvestment program (in shares) | 128 | 128 | |||||
Shares issued under dividend reinvestment program | $ 3,430 | $ 1 | 3,429 | 3,430 | |||
Share grants, net of forfeitures and tax withholdings (in shares) | 109 | ||||||
Share grants, net of forfeitures and tax withholdings | 6,053 | $ 1 | 6,052 | 6,053 | |||
Balance (in shares) at Sep. 30, 2019 | 80,292 | ||||||
Balance at Sep. 30, 2019 | 1,324,243 | $ 803 | 1,539,734 | (212,978) | (3,659) | 1,323,900 | 343 |
Balance (in shares) at Jun. 30, 2019 | 80,082 | ||||||
Balance at Jun. 30, 2019 | 1,010,708 | $ 801 | 1,532,497 | (521,661) | (1,272) | 1,010,365 | 343 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to the controlling interests | 332,770 | 332,770 | 332,770 | ||||
Unrealized gain (loss) on interest rate hedges | (2,387) | (2,387) | (2,387) | ||||
Dividends | (24,087) | (24,087) | (24,087) | ||||
Equity issuances, net of issuance costs (in shares) | 145 | ||||||
Equity issuances, net of issuance costs | $ 3,681 | $ 2 | 3,679 | 3,681 | |||
Shares issued under dividend reinvestment program (in shares) | 64 | 64 | |||||
Shares issued under dividend reinvestment program | $ 1,757 | $ 0 | 1,757 | 1,757 | |||
Share grants, net of forfeitures and tax withholdings (in shares) | 1 | ||||||
Share grants, net of forfeitures and tax withholdings | 1,801 | 1,801 | 1,801 | ||||
Balance (in shares) at Sep. 30, 2019 | 80,292 | ||||||
Balance at Sep. 30, 2019 | $ 1,324,243 | $ 803 | $ 1,539,734 | $ (212,978) | $ (3,659) | $ 1,323,900 | $ 343 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities | ||
Net income | $ 329,352 | $ 19,942 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 102,367 | 90,119 |
Credit (recoveries) losses on lease related receivables | (45) | 1,077 |
Real estate impairment | 8,374 | 1,886 |
Gain on sale of real estate | (337,978) | (2,495) |
Share-based compensation expense | 6,265 | 5,064 |
Amortization of debt premiums, discounts and related financing costs | 2,632 | 1,565 |
Loss on extinguishment of debt | 764 | 0 |
Loss on extinguishment of debt | 0 | 1,178 |
Changes in operating other assets | (12,353) | (9,233) |
Changes in operating other liabilities | (8,098) | (8,229) |
Net cash provided by operating activities | 91,280 | 100,874 |
Cash flows from investing activities | ||
Real estate acquisitions, net | (528,588) | (106,400) |
Net cash received for sale of real estate | 582,551 | 174,297 |
Capital improvements to real estate | (30,588) | (33,437) |
Development in progress | (26,884) | (25,036) |
Non-real estate capital improvements | (317) | (626) |
Net cash (used in) provided by investing activities | (3,826) | 8,798 |
Cash flows from financing activities | ||
Line of credit borrowings, net | 23,000 | 17,000 |
Dividends paid | (96,361) | (95,059) |
Principal payments – mortgage notes payable | (12,596) | (169,480) |
Repayments of unsecured term loan debt | (450,000) | (150,000) |
Proceeds from term loan | 450,000 | 250,000 |
Payment of financing costs | (1,219) | (5,565) |
Distributions to noncontrolling interests | (8) | (11) |
Proceeds from dividend reinvestment program | 3,430 | 1,811 |
Net proceeds from equity issuances | 3,681 | 35,472 |
Payment of tax withholdings for restricted share awards | (512) | (301) |
Net cash used in financing activities | (80,585) | (116,133) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 6,869 | (6,461) |
Cash, cash equivalents and restricted cash at beginning of period | 7,640 | 12,623 |
Cash, cash equivalents and restricted cash at end of period | 14,509 | 6,162 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest, net of amounts capitalized | 34,481 | 32,021 |
Change in accrued capital improvements and development costs | 13,638 | 6,352 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash, cash equivalents and restricted cash | $ 7,640 | $ 12,623 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | NATURE OF BUSINESS Washington Real Estate Investment Trust (“WashREIT”), a Maryland real estate investment trust, is a self-administered equity real estate investment trust, successor to a trust organized in 1960. Our business consists of the ownership and operation of income producing real estate properties in the greater Washington metro region. We own a diversified portfolio of commercial and multifamily buildings. During the 2019 Quarter (as defined below), we sold eight retail properties (see note 3 ). These properties met the criteria for classification as discontinued operations. The remaining retail properties do not meet the qualitative or quantitative criteria for a reportable segment (see note 11 ). The acquisitions of multifamily properties and dispositions of retail properties are part of a strategic shift away from the retail sector to the multifamily sector. This strategic shift simplifies our portfolio to two reportable segments (office and multifamily) and reduces our exposure to future retail lease expirations. Federal Income Taxes We believe that we qualify as a real estate investment trust (“REIT”) under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code"), and intend to continue to qualify as such. To maintain our status as a REIT, we are, among other things, required to distribute 90% of our REIT taxable income (which is, generally, our ordinary taxable income, with certain modifications), excluding any net capital gains and any deductions for dividends paid to our shareholders on an annual basis. When selling a property, we generally have the option of (a) reinvesting the sales proceeds of property sold, in a way that allows us to defer recognition of some or all taxable gain realized on the sale, (b) distributing gains to the shareholders with no tax to us or (c) treating net long-term capital gains as having been distributed to our shareholders, paying the tax on the gain deemed distributed and allocating the tax paid as a credit to our shareholders. Seven of the eight retail properties sold during the 2019 Quarter were identified for deferred exchanges under Section 1031 of the Code (see note 3). We acquired eight multifamily replacement properties (see note 3) during the 2019 Period (as defined below). Generally, and subject to our ongoing qualification as a REIT, no provisions for income taxes are necessary except for taxes on undistributed taxable income and taxes on the income generated by our taxable REIT subsidiaries (“TRSs”). Our TRSs are subject to corporate federal and state income tax on their taxable income at regular statutory rates, or as calculated under the alternative minimum tax, as appropriate. As of both September 30, 2019 and December 31, 2018 , our TRSs had a deferred tax asset of $1.4 million that was fully reserved. As of both September 30, 2019 and December 31, 2018 , we had deferred state and local tax liabilities of $0.6 million . These deferred tax liabilities are primarily related to temporary differences in the timing of the recognition of revenue, depreciation and amortization. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Basis of Presentations | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Basis of Presentations | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATIONS Significant Accounting Policies We have prepared our consolidated financial statements using the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2018 , except as noted in note 4 related to our adoption of ASU 2016-02, Leases (Topic 842) as of January 1, 2019. Pronouncements Adopted Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other significant Matters ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). This standard amends existing lease accounting standards for both lessees and lessors. Lessees must classify most leases as either finance or operating leases. For lease contracts, or contracts with an embedded lease, with a duration of more than one year in which we are the lessee, the present value of future lease payments are recognized on our consolidated balance sheets as a right-of-use asset and a corresponding lease liability. Leases (Topic 842) - Targeted Improvements (“ASU 2018-11”), which provides lessors optional transition relief from implementing this aspect of ASU 2016-02 if the following criteria are met: (1) both components have the same timing and pattern of revenue and (2) if accounted for separately, both components would be classified as an operating lease. We adopted the new standard as of January 1, 2019. We adopted ASU 2016-02 as of January 1, 2019 using the modified retrospective approach and by applying the transitional practical expedients noted below. Under the modified retrospective approach, we recognized a cumulative effect adjustment of $0.9 million to retained earnings as of January 1, 2019 (see note 4 for further discussion of the impact of adoption on our consolidated financial statements). We did not elect the hindsight expedient, which would have allowed us to reevaluate lease terms in calculating lease liabilities as part of adoption. Under ASU 2018-11, the FASB offered optional transition relief, if elected as a package, and applied consistently by an entity to all of its leases. Accordingly, upon adoption we elected, as a package, the practical expedients for all leases as follows: (1) we will not reassess whether any expired or existing contracts are or contain leases, (2) we will not reassess the lease classification for any expired or existing leases, and (3) we will not reassess initial direct costs for any existing leases. Pronouncements Not Yet Adopted Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other significant Matters ASU 2016-13, Measurement of Credit Losses on Financial Instruments . This standard requires financial assets measured at an amortized cost basis, including trade receivables, to be presented at the net amount expected to be collected. The new standard is effective for public entities for fiscal years beginning after December 15, 2019 and for interim periods therein, with adoption one year earlier permitted. We are currently evaluating the impact the new standard may have on our consolidated financial statements. ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software . This standard requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as assets. The standard is effective for public entities for fiscal years beginning after December 31, 2019 and for interim periods therein, with early adoption permitted. We are currently evaluating the impact the new standard may have on our consolidated financial statements. Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements include the consolidated accounts of WashREIT, our majority-owned subsidiaries and entities in which WashREIT has a controlling interest. All intercompany balances and transactions have been eliminated in consolidation. We have prepared the accompanying unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information presented not misleading. In addition, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for the periods presented have been included. These unaudited financial statements should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2018 . Within these notes to the financial statements, we refer to the three months ended September 30, 2019 and September 30, 2018 as the “ 2019 Quarter” and the “ 2018 Quarter,” respectively, and the nine months ended September 30, 2019 and September 30, 2018 as the “ 2019 Period” and the “ 2018 Period,” respectively. Discontinued Operations We classify properties as held for sale when they meet the necessary criteria, which include: (a) senior management commits to a plan to sell the assets, (b) the assets are available for immediate sale in their present condition subject only to terms that are usual and customary for sales of such assets, (c) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated, (d) the sale of the assets is probable, and transfer of the assets is expected to qualify for recognition as a completed sale, within one year, (e) the assets are being actively marketed for sale at a price that is reasonable in relation to its current fair value and (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Depreciation on these properties is discontinued at the time they are classified as held for sale, but operating revenues, operating expenses and interest expense continue to be recognized until the date of sale. Revenues and expenses of properties that are either sold or classified as held for sale are presented as discontinued operations for all periods presented in the consolidated statements of operations if the dispositions represent a strategic shift that has (or will have) a major effect on our operations and financial results. Interest on debt that can be identified as specifically attributed to these properties is included in discontinued operations. If the dispositions do not represent a strategic shift that has (or will have) a major effect on our operations and financial results, then the revenues and expenses of the properties that are classified as sold or held for sale are presented as continuing operations in the consolidated statements of operations for all periods presented. Restricted Cash Restricted cash includes funds escrowed for tenant security deposits, real estate tax, insurance and mortgage escrows and escrow deposits required by lenders on certain of our properties to be used for future building renovations or tenant improvements. Use of Estimates in the Financial Statements The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Real Estate
Real Estate | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate [Abstract] | |
Real Estate | REAL ESTATE Acquisitions We acquired the following properties during the 2019 Period: Acquisition Date Property Type # of units (unaudited) Contract Purchase Price (in thousands) April 30, 2019 Assembly Portfolio - Virginia (1) Multifamily 1,685 $ 379,100 June 27, 2019 Assembly Portfolio - Maryland (2) Multifamily 428 82,070 July 23, 2019 Cascade at Landmark Multifamily 277 69,750 2,390 $ 530,920 (1) Consists of Assembly Alexandria, Assembly Manassas, Assembly Dulles, Assembly Leesburg, and Assembly Herndon. (2) Consists of Assembly Germantown and Assembly Watkins Mill. The Assembly Portfolio - Virginia and Assembly Portfolio - Maryland properties are collectively the “Assembly Portfolio.” The purchases of the Assembly Portfolio and Cascade at Landmark were structured as exchanges under Section 1031 of the Code in a manner such that legal title was held by an Exchange Accommodator until certain identified properties were sold and the deferred exchanges were completed. We retained all of the legal and economic benefits and obligations related to the Assembly Portfolio and Cascade at Landmark. As such, the Assembly Portfolio and Cascade at Landmark were considered to be variable interest entities until legal title was transferred to us upon completion of the 1031 exchanges, which occurred during the 2019 Quarter. We consolidated the assets and liabilities of the Assembly Portfolio and Cascade at Landmark because we determined that WashREIT was the primary beneficiary of the Assembly Portfolio and Cascade at Landmark. The results of operations from the 2019 acquisitions are included in the consolidated statements of operations as of their acquisition dates and are as follows: Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Real estate rental revenue $ 11,013 $ 16,467 Net loss (4,698 ) (8,179 ) We accounted for the 2019 acquisitions as asset acquisitions. Accordingly, we capitalized $2.9 million of costs directly associated with the acquisitions. We measured the value of the acquired physical assets (land and building) and in-place leases (absorption costs) by allocating the total cost of the acquisitions on a relative fair value basis. The total cost of the 2019 acquisitions was as follows (in thousands): Assembly Portfolio Cascade at Landmark Total Contract purchase price $ 461,170 $ 69,750 $ 530,920 Credit to buyer (2,252 ) — (2,252 ) Capitalized acquisition costs 2,362 498 2,860 Total $ 461,280 $ 70,248 $ 531,528 We have recorded the total cost of the 2019 acquisitions as follows (in thousands): Land $ 92,391 Building 423,663 Absorption costs 15,474 Total $ 531,528 The weighted remaining average life for the absorption costs is two months . The difference in the total cost of the acquisitions of $531.5 million and the acquisition cost per the consolidated statements of cash flows of $528.6 million is primarily due to credits received at settlement totaling $2.9 million . Development/Redevelopment We have properties under development/redevelopment and held for current or future development as of September 30, 2019 . In the multifamily segment, we have The Trove, a multifamily development adjacent to The Wellington, and own land held for future multifamily development adjacent to Riverside Apartments. As of September 30, 2019 , we had invested $95.7 million and $24.2 million , including the costs of acquiring the land, in The Trove and the development adjacent to Riverside Apartments, respectively. We substantially completed major construction activities for The Trove garage levels 1-5 during the 2019 Quarter and placed into service assets totaling $12.0 million . We also had a redevelopment project to add rentable space at Spring Valley Village, a retail center in Washington, DC. As of September 30, 2019 , we had invested $6.5 million in the redevelopment. We substantially completed major construction activities on this project during the fourth quarter of 2018 and placed into service assets totaling $4.2 million . Properties Sold and Held for Sale We intend to hold our properties for investment with a view to long-term appreciation, to engage in the business of acquiring, developing and owning our properties, and to make occasional sales of the properties that no longer meet our long-term strategy or return objectives and where market conditions for sale are favorable. The proceeds from the sales may be reinvested into other properties, used to fund development operations or to support other corporate needs, or distributed to our shareholders. We sold the following properties during 2019 and 2018: Disposition Date Property Name Property Type Rentable Square Feet Contract Sales Price (Loss) Gain on Sale June 26, 2019 Quantico Corporate Center (1) Office 272,000 $ 33,000 $ (1,046 ) July 23, 2019 Shopping Center Portfolio (2) Retail 800,000 485,250 333,023 August 21, 2019 Frederick Crossing and Frederick County Square Retail 520,000 57,500 9,507 August 27, 2019 Centre at Hagerstown Retail 330,000 23,500 (3,506 ) Total 2019 1,922,000 $ 599,250 $ 337,978 January 19, 2018 Braddock Metro Center Office 356,000 $ 93,000 $ — June 28, 2018 2445 M Street Office 292,000 101,600 2,495 Total 2018 648,000 $ 194,600 $ 2,495 (1) Consists of 925 and 1000 Corporate Drive. (2) Consists of five retail properties: Gateway Overlook, Wheaton Park, Olney Village Center, Bradlee Shopping Center and Shoppes of Foxchase. During the first quarter of 2018, we executed a purchase and sale agreement to sell 2445 M Street, a 292,000 square foot office property in Washington, DC, for a contract sales price of $100.0 million , with settlement originally scheduled for the third quarter of 2018. During 2017, we evaluated 2445 M Street for impairment and recognized a $24.1 million impairment charge in order to reduce the carrying value of the property to its estimated fair value. Upon execution of the purchase and sale agreement, the property met the criteria for classification as held for sale. Due to the property’s classification as held for sale, we recorded an additional impairment charge of $1.9 million in the first quarter of 2018 in order to reduce the carrying value of the property to its estimated fair value, less estimated selling costs. We based this fair value on the expected sales price from a potential sale. There are few observable market transactions for similar properties. This fair valuation falls into Level 2 of the fair value hierarchy due to its reliance on a quoted price in a market that is not active. During the second quarter of 2018, we executed an amendment to the purchase and sale agreement which increased the contract sales price to $101.6 million and advanced the settlement date. On June 28, 2018, we sold 2445 M Street, recognizing a gain on sale of real estate of $2.5 million . During the first quarter of 2019, we executed a letter of intent for the sale of Quantico Corporate Center, an office property in Stafford, Virginia, consisting of two office buildings totaling 272,000 square feet. The property did not meet the criteria for classification as held for sale as of March 31, 2019. Due to the negotiations to sell the property, we evaluated Quantico Corporate Center for impairment and recognized an $8.4 million impairment charge during the first quarter of 2019 in order to reduce the carrying value of the property to its estimated fair value. We based this fair valuation on the expected sale price from a potential sale. There are few observable market transactions for similar properties. This fair valuation falls into Level 2 of the fair value hierarchy due to its reliance on a quoted price in a market that is not active. On April 22, 2019, we executed a purchase and sale agreement to sell Quantico Corporate Center for a contract sale price of $33.0 million . On June 26, 2019 , we sold Quantico Corporate Center, recognizing a loss on sale of real estate of $1.0 million . In June 2019, we entered into two separate purchase and sale agreements with two separate buyers to sell the Shopping Center Portfolio and the Power Center Portfolio (Frederick Crossing, Frederick County Square and Centre at Hagerstown). As of June 30, 2019, we had a non-refundable deposit from the potential buyer of the Shopping Center Portfolio and expected to receive a non-refundable deposit from the potential buyer of the Power Center Portfolio in July 2019. As of June 30, 2019, the properties in the Retail Portfolio (as defined below) met the criteria for classification as held for sale. We closed on the Shopping Center Portfolio sale transaction on July 23, 2019, recognizing a gain on sale of real estate of $333.0 million . Prior to closing on the disposition of the Shopping Center Portfolio, we prepaid the mortgage note secured by Olney Village Center, incurring a loss on extinguishment of debt of approximately $0.8 million , which we recognized in the 2019 Quarter. Subsequent to the end of the second quarter of 2019, the purchase and sale agreement to sell the Power Center Portfolio was amended to include only Frederick Crossing and Frederick County Square. We closed on the sales of these assets on August 21, 2019, recognizing a gain on sale of real estate of $9.5 million . Following the amendment to the purchase and sale agreement to sell the Power Center Portfolio, we marketed Centre at Hagerstown for sale and identified a separate buyer. We closed on the sales of this asset on August 27, 2019, recognizing a loss on sale of real estate of $3.5 million . References to the “Retail Portfolio” include the Shopping Center Portfolio, Frederick Crossing, Frederick County Square and Centre at Hagerstown. The disposition of the Retail Portfolio represents a strategic shift that will have a major effect on our financial results and we have accordingly reported the Retail Portfolio as discontinued operations. The Retail Portfolio represents a majority of our retail assets and we have determined that our retail line of business is no longer a reportable segment (see note 11). We have fully transferred control of the assets associated with the sold properties. Discontinued Operations The results of the Retail Portfolio are classified as discontinued operations and are summarized as follows (amounts in thousands, except for share data): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Real estate rental revenue $ 4,126 $ 11,500 $ 28,200 $ 33,998 Real estate expenses (1,095 ) (2,582 ) (6,803 ) (8,036 ) Depreciation and amortization (59 ) (2,321 ) (4,926 ) (6,985 ) Interest expense (30 ) (157 ) (313 ) (492 ) Loss on extinguishment of debt (764 ) — (764 ) — Gain on sale of real estate 339,024 — 339,024 — Income from discontinued operations $ 341,202 $ 6,440 $ 354,418 $ 18,485 Basic net income per share $ 4.24 $ 0.08 $ 4.41 $ 0.23 Diluted net income per share $ 4.24 $ 0.08 $ 4.41 $ 0.23 Capital expenditures $ — $ 1,020 $ 809 $ 1,834 All assets related to the Retail Portfolio were sold as of September 30, 2019 . As of December 31, 2018 , assets related to the Retail Portfolio were as follows (in thousands): December 31, 2018 Land $ 88,087 Income producing property 216,577 304,664 Accumulated depreciation and amortization (101,254 ) Income producing property, net 203,410 Rents and other receivables 9,898 Prepaid expenses and other assets 8,653 Total assets $ 221,961 All liabilities related to the Retail Portfolio were sold as of September 30, 2019 . As of December 31, 2018 , liabilities related to the Retail Portfolio were as follows (in thousands): December 31, 2018 Mortgage notes payable, net $ 11,515 Accounts payable and other liabilities 1,620 Advance rents 1,771 Tenant security deposits 612 Liabilities related to properties sold or held for sale $ 15,518 |
Lease Accounting
Lease Accounting | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Lease Accounting | LEASE ACCOUNTING Leasing as a Lessor Revenue Recognition We lease multifamily properties under operating leases with terms of generally one year or less. We lease commercial properties (our office and retail properties) under operating leases with an average term of seven years . Substantially all commercial leases contain fixed escalations or, in some instances, changes based on the Consumer Price Index, which occur at specified times during the term of the lease. In certain commercial leases, variable lease income, such as percentage rent, is recognized when rents are earned. We recognize rental income and rental abatements from our multifamily and commercial leases on a straight-line basis over the lease term. Recognition of rental income commences when control of the leased space has been transferred to the tenant. We recognize cost reimbursement income from pass-through expenses on an accrual basis over the periods in which the expenses were incurred. Pass-through expenses are comprised of real estate taxes, operating expenses and common area maintenance costs which are reimbursed by tenants in accordance with specific allowable costs per tenant lease agreements. Parking revenues are derived from leases, monthly parking agreements and transient parking. We recognize parking revenues from leases on a straight-line basis over the lease term and other parking revenues as earned. We recognize transient parking revenue when our performance obligation is met. Upon adoption of ASU 2016-02, we elected not to bifurcate lease contracts into lease and non-lease components, since the timing and pattern of revenue is not materially different and the non-lease components are not the primary component of the lease. Accordingly, both lease and non-lease components are presented in “Real estate rental revenue” in our consolidated financial statements. The adoption of ASU 2016-02 did not result in a material change to our recognition of real estate rental revenue. Accounts Receivable Lease related receivables, which include contractual amounts accrued and unpaid from tenants and accrued straight-line rents receivable, are reduced for credit losses. Such amounts are recognized as a reduction to real estate rental revenues. We evaluate the collectability of lease receivables monthly using several factors including a lessee’s creditworthiness. We recognize the credit loss on lease related receivables when, in the opinion of management, collection of substantially all lease payments is not probable. When collectability is determined not probable, any lease income recognized subsequent to recognizing the credit loss is limited to the lesser of the lease income reflected on a straight-line basis or cash collected. The adoption of ASU 2016-02 resulted in an adjustment to our opening distributions in excess of net income balance of $0.9 million , associated with lease related receivables where collection of substantially all operating lease payments was not probable as of January 1, 2019. Future Minimum Rental Income As of September 30, 2019 , non-cancelable commercial operating leases provide for future minimum rental income from continuing operations as follows (in thousands). Apartment leases are not included as the terms are generally for one year or less. 2019 $ 38,665 2020 153,366 2021 136,394 2022 122,558 2023 105,126 Thereafter 396,401 $ 952,510 As of December 31, 2018, non-cancelable commercial operating leases provide for future minimum rental income from continuing operations as follows (in thousands): 2019 $ 154,260 2020 143,566 2021 125,008 2022 108,688 2023 89,969 Thereafter 253,749 $ 875,240 Leasing as a Lessee 2000 M Street, an office property in Washington, DC, is subject to an operating ground lease with a remaining term of 52 years . Rental payments under this lease are subject to percentage rent variable payments, which are not included as part of our measurement of straight-line rental expense. We recognized variable rental payments of $0.3 million during each of the 2019 and 2018 Quarters and $0.9 million and $0.8 million during 2019 and 2018 Periods, respectively. Upon adoption of ASU 2016-02, we recognized a right of use asset (included in Income producing property) and lease liability (included in Accounts payable and other liabilities) of $4.2 million . We used a discount rate of approximately 5.9% , which was derived from our assessment of securitized rates for similar assets and credit quality. We recognized $0.1 million and $0.2 million of right-of-use and lease liability amortization during the 2019 Quarter and 2019 Period, respectively. In addition, as of January 1, 2019 we reclassified the associated below-market ground lease intangible asset of $10.0 million , net of accumulated amortization of $2.1 million , from Prepaid expenses and other assets to Income producing property on our consolidated balance sheets. The following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments on our operating ground lease as of September 30, 2019 and a reconciliation of those cash flows to the operating lease liability as of September 30, 2019 (in thousands): 2019 $ 65 2020 260 2021 260 2022 260 2023 260 2024 260 Thereafter 11,895 13,260 Imputed interest (9,229 ) Lease liability $ 4,031 |
Lease Accounting | LEASE ACCOUNTING Leasing as a Lessor Revenue Recognition We lease multifamily properties under operating leases with terms of generally one year or less. We lease commercial properties (our office and retail properties) under operating leases with an average term of seven years . Substantially all commercial leases contain fixed escalations or, in some instances, changes based on the Consumer Price Index, which occur at specified times during the term of the lease. In certain commercial leases, variable lease income, such as percentage rent, is recognized when rents are earned. We recognize rental income and rental abatements from our multifamily and commercial leases on a straight-line basis over the lease term. Recognition of rental income commences when control of the leased space has been transferred to the tenant. We recognize cost reimbursement income from pass-through expenses on an accrual basis over the periods in which the expenses were incurred. Pass-through expenses are comprised of real estate taxes, operating expenses and common area maintenance costs which are reimbursed by tenants in accordance with specific allowable costs per tenant lease agreements. Parking revenues are derived from leases, monthly parking agreements and transient parking. We recognize parking revenues from leases on a straight-line basis over the lease term and other parking revenues as earned. We recognize transient parking revenue when our performance obligation is met. Upon adoption of ASU 2016-02, we elected not to bifurcate lease contracts into lease and non-lease components, since the timing and pattern of revenue is not materially different and the non-lease components are not the primary component of the lease. Accordingly, both lease and non-lease components are presented in “Real estate rental revenue” in our consolidated financial statements. The adoption of ASU 2016-02 did not result in a material change to our recognition of real estate rental revenue. Accounts Receivable Lease related receivables, which include contractual amounts accrued and unpaid from tenants and accrued straight-line rents receivable, are reduced for credit losses. Such amounts are recognized as a reduction to real estate rental revenues. We evaluate the collectability of lease receivables monthly using several factors including a lessee’s creditworthiness. We recognize the credit loss on lease related receivables when, in the opinion of management, collection of substantially all lease payments is not probable. When collectability is determined not probable, any lease income recognized subsequent to recognizing the credit loss is limited to the lesser of the lease income reflected on a straight-line basis or cash collected. The adoption of ASU 2016-02 resulted in an adjustment to our opening distributions in excess of net income balance of $0.9 million , associated with lease related receivables where collection of substantially all operating lease payments was not probable as of January 1, 2019. Future Minimum Rental Income As of September 30, 2019 , non-cancelable commercial operating leases provide for future minimum rental income from continuing operations as follows (in thousands). Apartment leases are not included as the terms are generally for one year or less. 2019 $ 38,665 2020 153,366 2021 136,394 2022 122,558 2023 105,126 Thereafter 396,401 $ 952,510 As of December 31, 2018, non-cancelable commercial operating leases provide for future minimum rental income from continuing operations as follows (in thousands): 2019 $ 154,260 2020 143,566 2021 125,008 2022 108,688 2023 89,969 Thereafter 253,749 $ 875,240 Leasing as a Lessee 2000 M Street, an office property in Washington, DC, is subject to an operating ground lease with a remaining term of 52 years . Rental payments under this lease are subject to percentage rent variable payments, which are not included as part of our measurement of straight-line rental expense. We recognized variable rental payments of $0.3 million during each of the 2019 and 2018 Quarters and $0.9 million and $0.8 million during 2019 and 2018 Periods, respectively. Upon adoption of ASU 2016-02, we recognized a right of use asset (included in Income producing property) and lease liability (included in Accounts payable and other liabilities) of $4.2 million . We used a discount rate of approximately 5.9% , which was derived from our assessment of securitized rates for similar assets and credit quality. We recognized $0.1 million and $0.2 million of right-of-use and lease liability amortization during the 2019 Quarter and 2019 Period, respectively. In addition, as of January 1, 2019 we reclassified the associated below-market ground lease intangible asset of $10.0 million , net of accumulated amortization of $2.1 million , from Prepaid expenses and other assets to Income producing property on our consolidated balance sheets. The following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments on our operating ground lease as of September 30, 2019 and a reconciliation of those cash flows to the operating lease liability as of September 30, 2019 (in thousands): 2019 $ 65 2020 260 2021 260 2022 260 2023 260 2024 260 Thereafter 11,895 13,260 Imputed interest (9,229 ) Lease liability $ 4,031 |
Unsecured Line of Credit Payabl
Unsecured Line of Credit Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Unsecured Line of Credit Payable | UNSECURED LINE OF CREDIT PAYABLE During the first quarter of 2018, we entered into an amended and restated credit agreement (“Credit Agreement”) which provides for a $700.0 million unsecured revolving credit facility (“Revolving Credit Facility”), the continuation of an existing $150.0 million unsecured term loan (“2015 Term Loan”) and an additional $250.0 million unsecured term loan (“2018 Term Loan”). The Revolving Credit Facility has a four -year term ending in March 2022 , with two six -month extension options. The Credit Agreement has an accordion feature that allows us to increase the aggregate facility to $1.5 billion , subject to the lenders’ agreement to provide additional revolving loan commitments or term loans. The Revolving Credit Facility bears interest at a rate of either one month LIBOR plus a margin ranging from 0.775% to 1.55% or the base rate plus a margin ranging from 0.0% to 0.55% (in each case depending upon WashREIT’s credit rating). The base rate is the highest of the administrative agent’s prime rate, the federal funds rate plus 0.50% and the LIBOR market index rate plus 1.0% . In addition, the Revolving Credit Facility requires the payment of a facility fee ranging from 0.10% to 0.30% (depending on WashREIT’s credit rating) on the $700.0 million committed revolving loan capacity, without regard to usage. As of September 30, 2019 , the interest rate on the Revolving Credit Facility is one month LIBOR plus 1.00% , the one month LIBOR is 2.02% and the facility fee is 0.20% . All outstanding advances for the Revolving Credit Facility are due and payable upon maturity in March 2022, unless extended pursuant to one or both of the two six-month extension options. Interest only payments are due and payable generally on a monthly basis. The 2018 Term Loan increases and replaces the $150.0 million unsecured term loan, initially entered into on July 22, 2016 (“2016 Term Loan”), that was scheduled to mature in July 2023. The 2018 Term Loan is scheduled to mature in July 2023 and bears interest at a rate of either one month LIBOR plus a margin ranging from 0.85% to 1.75% or the base rate plus a margin ranging from 0.0% to 0.75% (in each case depending upon WashREIT’s credit rating). We used the $100.0 million of additional proceeds from the 2018 Term Loan primarily to repay outstanding borrowings on the Revolving Credit Facility. We had previously used interest rate derivatives to effectively fix the interest rate of the 2016 Term Loan. These interest rate derivatives now effectively fix the interest rate on a $150.0 million portion of the 2018 Term Loan at 2.31% . In March 2018, we entered into interest rate derivatives that commenced on June 29, 2018 to effectively fix the interest rate on the remaining $100.0 million of the 2018 Term Loan at 3.71% . The 2018 Term Loan has an all-in fixed interest rate of 2.87% . The amount of the Revolving Credit Facility’s unsecured line of credit unused and available at September 30, 2019 is as follows (in thousands): Committed capacity $ 700,000 Borrowings outstanding (211,000 ) Unused and available $ 489,000 We executed borrowings and repayments on the Revolving Credit Facility during the 2019 Period as follows (in thousands): Balance, December 31, 2018 $ 188,000 Borrowings 659,000 Repayments (636,000 ) Balance, September 30, 2019 $ 211,000 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTES PAYABLE On April 30, 2019, we entered into a six-month, $450.0 million unsecured term loan facility (“2019 Term Loan”), maturing on October 30, 2019 with an option to extend for a six-month period. The 2019 Term Loan bore interest, at WashREIT’s option, at a rate of either LIBOR plus a margin ranging from 0.75% to 1.65% or the base rate plus a margin ranging 0.0% to 0.65% (in each case depending upon WashREIT’s credit rating). The base rate is the highest of the administrative agent’s prime rate, the federal funds rate plus 0.50% and the daily one-month LIBOR rate plus 1.0% . At WashREIT’s election, the 2019 Term Loan had an interest rate of one-week LIBOR plus 100 basis points, based on WashREIT’s current unsecured debt rating. The 2019 Term Loan was used to fund the acquisition of the Assembly Portfolio (see note 3 ) . During the 2019 Quarter, we repaid the $450.0 million of borrowings on the 2019 Term Loan with proceeds from the sale of the Retail Portfolio (see note 3 ). |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS On September 15, 2015 , we entered into two interest rate swap arrangements with a total notional amount of $150.0 million to swap the floating interest rate under the $150.0 million 2015 Term Loan (see note 5 ) to an all-in fixed interest rate of 2.72% starting on October 15, 2015 and extending until the maturity of the 2015 Term Loan on March 15, 2021 . On July 22, 2016 , we entered into two forward interest rate swap arrangements with a total notional amount of $150.0 million to swap the floating interest rate under the $150.0 million 2016 Term Loan (see note 5 ) to an all-in fixed interest rate of 2.86% starting on March 31, 2017 and extending until the maturity of the 2016 Term Loan on July 21, 2023 . On March 29, 2018, we entered into the $250.0 million 2018 Term Loan (see note 5 ) maturing on July 21, 2023, which increased and replaced the 2016 Term Loan. The interest rate swap arrangements that had effectively fixed the 2016 Term Loan now effectively fix the interest rate on a $150.0 million portion of the 2018 Term Loan at 2.31% . On March 29, 2018, we entered into four interest rate swap arrangements with a total notional amount of $100.0 million to effectively fix the interest rate on the remaining $100.0 million of the 2018 Term Loan at 3.71% , that commenced on June 29, 2018 and extending until the maturity of the 2018 Term Loan on July 21, 2023 . The $250.0 million 2018 Term Loan has an all-in fixed interest rate of 2.87% . The interest rate swaps qualify as cash flow hedges and are recorded at fair value in accordance with GAAP, based on discounted cash flow methodologies and observable inputs. We record the total change in fair value of the interest rate swap arrangements associated with our cash flow hedges in other comprehensive (loss) income. The resulting unrealized (loss) gain of the cash flow hedges was the only activity in other comprehensive (loss) income during the periods presented in our consolidated financial statements. We assess the effectiveness of our cash flow hedges both at inception and on an ongoing basis. The cash flow hedges were highly effective for all periods presented. The fair values of the interest rate swaps as of September 30, 2019 and December 31, 2018 , are as follows (in thousands): Fair Value Derivative Assets (Liabilities) Derivative Instrument Aggregate Notional Amount Effective Date Maturity Date September 30, 2019 December 31, 2018 Interest rate swaps $ 150,000 October 15, 2015 March 15, 2021 $ (140 ) $ 2,720 Interest rate swaps 150,000 March 31, 2017 July 21, 2023 1,007 7,918 Interest rate swaps 100,000 June 29, 2018 July 21, 2023 (4,526 ) (799 ) $ 400,000 $ (3,659 ) $ 9,839 We record interest rate swaps on our consolidated balance sheets within prepaid expenses and other assets when in a net asset position and within accounts payable and other liabilities when in a net liability position. The interest rate swaps have been effective since inception. The net gains or losses on the effective swaps are recognized in other comprehensive (loss) income, as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Unrealized (loss) gain on interest rate swaps $ (2,387 ) $ 1,474 $ (13,498 ) $ 7,762 Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the next twelve months, we estimate that an additional $0.3 million will be reclassified as an increase to interest expense. We have agreements with each of our derivative counterparties that contain a provision whereby we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness. As of September 30, 2019 , the fair value of derivative assets, including accrued interest, was $1.0 million , and the fair value of the derivative liabilities, including accrued interest, was $4.7 million . As of September 30, 2019 , we have not posted any collateral related to these agreements. Derivative instruments expose us to credit risk in the event of non-performance by the counterparty under the terms of the interest rate hedge agreements. We believe that we minimize our credit risk on these transactions by dealing with major, creditworthy financial institutions. We monitor the credit ratings of counterparties and our exposure to any single entity, thus minimizing our credit risk concentration. |
Fair Value Disclosures
Fair Value Disclosures | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | FAIR VALUE DISCLOSURES Assets and Liabilities Measured at Fair Value For assets and liabilities measured at fair value on a recurring basis, quantitative disclosures about the fair value measurements are required to be disclosed separately for each major category of assets and liabilities, as follows: Level 1: Quoted prices in active markets for identical assets Level 2: Significant other observable inputs Level 3: Significant unobservable inputs The only assets or liabilities we had at September 30, 2019 and December 31, 2018 that are recorded at fair value on a recurring basis are the assets held in the Supplemental Executive Retirement Plan (“SERP”), which primarily consist of investments in mutual funds, and the interest rate swaps (see note 7 ). We base the valuations related to the SERP on assumptions derived from significant other observable inputs and accordingly these valuations fall into Level 2 in the fair value hierarchy. The valuation of the interest rate swaps is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each interest rate swap. This analysis reflects the contractual terms of the interest rate swaps, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of ASC 820, Fair Value Measurement , we incorporate credit valuation adjustments in the fair value measurements to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk. These credit valuation adjustments were concluded to not be significant inputs for the fair value calculations for the periods presented. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as the posting of collateral, thresholds, mutual puts and guarantees. The valuation of interest rate swaps fall into Level 2 in the fair value hierarchy. The fair values of these assets and liabilities at September 30, 2019 and December 31, 2018 were as follows (in thousands): September 30, 2019 December 31, 2018 Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Assets: SERP $ 1,636 $ — $ 1,636 $ — $ 1,364 $ — $ 1,364 $ — Interest rate swaps 1,007 — 1,007 — 10,638 — 10,638 — Liabilities: Interest rate swaps $ (4,666 ) $ — $ (4,666 ) $ — $ (799 ) $ — $ (799 ) $ — Financial Assets and Liabilities Not Measured at Fair Value The following disclosures of estimated fair value were determined by management using available market information and established valuation methodologies, including discounted cash flow models. Many of these estimates involve significant judgment. The estimated fair value disclosed may not necessarily be indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have an effect on the estimated fair value amounts. In addition, fair value estimates are made at a point in time and thus, estimates of fair value subsequent to September 30, 2019 may differ significantly from the amounts presented. The valuations of cash and cash equivalents and restricted cash fall into Level 1 in the fair value hierarchy and the valuations of debt instruments fall into Level 3 in the fair value hierarchy. As of September 30, 2019 and December 31, 2018 , the carrying values and estimated fair values of our financial instruments were as follows (in thousands): September 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Cash and cash equivalents $ 12,931 $ 12,931 $ 6,016 $ 6,016 Restricted cash 1,578 1,578 1,624 1,624 Mortgage notes payable, net 47,319 48,259 48,277 48,368 Line of credit 211,000 211,000 188,000 188,000 Notes payable, net 996,455 1,025,248 995,397 1,015,210 The mortgage note secured by Olney Village Center was reclassified to Other liabilities related to properties held for sale prior to its prepayment during the 2019 Quarter (see note 3 ). As of September 30, 2019 and December 31, 2018 , the carrying values and estimated fair values of the mortgage note secured by Olney Village Center were as follows (in thousands): September 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Mortgage notes payable, net $ — $ — $ 11,515 $ 12,030 |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | STOCK BASED COMPENSATION WashREIT maintains short-term (“STIP”) and long-term (“LTIP”) incentive plans that allow for stock based awards to officers and non-officer employees. Stock based awards are provided to officers and non-officer employees, as well as trustees, under the Washington Real Estate Investment Trust 2016 Omnibus Incentive Plan which allows for awards in the form of restricted shares, restricted share units, options and other awards up to an aggregate of 2,400,000 shares over the ten -year period in which the plan will be in effect. Restricted share units are converted into shares of our stock upon full vesting through the issuance of new shares. During the first quarter of 2019, we amended the STIP for executive officers and the STIP and LTIP for non-executive officers and staff to replace the use of core funds available for distribution as a performance metric and performance goal, respectively, with a Leasing Target performance metric and performance goal. Leasing Target means the aggregate annual leasing target amount (measured in square feet of leasing space) as approved by the compensation committee of our board of trustees for a given performance period and performance year, respectively, with regards to our office and retail properties. The amendments became effective as of March 18, 2019 for performance periods beginning on or after January 1, 2019. Total Compensation Expense Total compensation expense recognized in the consolidated financial statements for all outstanding share based awards was $1.7 million for both the 2019 Quarter and 2018 Quarter, and $6.3 million and $5.1 million for the 2019 Period and 2018 Period, respectively. Restricted Share Awards The total fair values of restricted share awards vested was $1.7 million and $1.1 million for the 2019 Period and 2018 Period, respectively. The total unvested restricted share awards at September 30, 2019 was 428,840 shares, which had a weighted average grant date fair value of $28.08 per share. As of September 30, 2019 , the total compensation cost related to unvested restricted share awards was $7.0 million , which we expect to recognize over a weighted average period of 24 |
Earnings per Common Share
Earnings per Common Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | EARNINGS PER COMMON SHARE We determine “Basic earnings per share” using the two-class method as our unvested restricted share awards and units have non-forfeitable rights to dividends, and are therefore considered participating securities. We compute basic earnings per share by dividing net income attributable to the controlling interest less the allocation of undistributed earnings to unvested restricted share awards and units by the weighted-average number of common shares outstanding for the period. We also determine “Diluted earnings per share” as the more dilutive of the two-class method or the treasury stock method with respect to the unvested restricted share awards. We further evaluate any other potentially dilutive securities at the end of the period and adjust the basic earnings per share calculation for the impact of those securities that are dilutive. Our dilutive earnings per share calculation includes the dilutive impact of operating partnership units under the if-converted method and our share based awards with performance conditions prior to the grant date and all market condition awards under the contingently issuable method. The computations of basic and diluted earnings per share for the three and nine months ended September 30, 2019 and 2018 were as follows (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: (Loss) income from continuing operations $ (8,432 ) $ (547 ) $ (25,066 ) $ 1,457 Allocation of losses (earnings) to unvested restricted share awards to continuing operations 47 (144 ) 118 (432 ) Adjusted (loss) income from continuing operations attributable to the controlling interests (8,385 ) (691 ) (24,948 ) 1,025 Income from discontinued operations 341,202 6,440 354,418 18,485 Allocation of earnings to unvested restricted share awards to discontinued operations (1,841 ) — (1,870 ) — Adjusted income from discontinuing operations 339,361 6,440 352,548 18,485 Adjusted net income attributable to the controlling interests $ 330,976 $ 5,749 $ 327,600 $ 19,510 Denominator: Weighted average shares outstanding – basic 79,981 79,076 79,933 78,695 Effect of dilutive securities: Operating partnership units — — — 12 Employee restricted share awards — — — 95 Weighted average shares outstanding – diluted 79,981 79,076 79,933 78,802 Earnings per common share, basic: Continuing operations $ (0.10 ) $ (0.01 ) $ (0.31 ) $ 0.01 Discontinued operations 4.24 0.08 4.41 0.23 Basic net income attributable to the controlling interests per common share (1) $ 4.14 $ 0.07 $ 4.10 $ 0.25 Earnings per common share, diluted: Continuing operations $ (0.10 ) $ (0.01 ) $ (0.31 ) $ 0.01 Discontinued operations 4.24 0.08 4.41 0.23 Diluted net income attributable to the controlling interests per common share (1) $ 4.14 $ 0.07 $ 4.10 $ 0.25 Dividends declared per common share $ 0.30 $ 0.30 $ 0.90 $ 0.90 (1) Earnings per share may not sum due to rounding. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION We have two reportable segments: office and multifamily. Office properties provide office space for various types of businesses and professions. Multifamily properties provide rental housing for individuals and families throughout the greater Washington metro region. We previously had a retail segment consisting of grocery store-anchored neighborhood centers that include other small shop tenants and regional power centers with several junior box tenants. During the second quarter of 2019, we executed purchase and sale agreements for the sale of eight retail properties, which properties were ultimately sold during the 2019 Quarter (see note 3 ). These properties met the criteria for classification as held for sale as of June 30, 2019 and are classified as discontinued operations. The remaining retail properties do not meet the qualitative or quantitative criteria for a reportable segment, and are classified within “Corporate and other” on our segment disclosure tables. The dispositions of the eight retail properties are part of a strategic shift away from the retail sector. This strategic shift simplified our portfolio to two reportable segments (office and multifamily) and reduced our exposure to future retail lease expirations. We evaluate performance based upon net operating income from the combined properties in each segment. Our reportable operating segments are consolidations of similar properties. GAAP requires that segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing each segment’s performance. Net operating income is a key measurement of our segment profit and loss. Net operating income is defined as real estate rental revenue less real estate expenses. The following tables present revenues, net operating income, capital expenditures and total assets for the three and nine months ended September 30, 2019 and 2018 from these segments, and reconcile net operating income of reportable segments to net income (loss) attributable to the controlling interests as reported (in thousands): Three Months Ended September 30, 2019 Office Multifamily Corporate and Other (1) Consolidated Real estate rental revenue $ 39,810 $ 35,790 $ 4,659 $ 80,259 Real estate expenses 15,148 14,232 1,312 30,692 Net operating income $ 24,662 $ 21,558 $ 3,347 $ 49,567 Depreciation and amortization (37,340 ) General and administrative expenses (6,045 ) Lease origination expenses (416 ) Interest expense (14,198 ) Discontinued operations: Income from operations of properties sold or held for sale 2,942 Gain on sale of real estate 339,024 Loss on extinguishment of debt (764 ) Net income 332,770 Less: Net income attributable to noncontrolling interests in subsidiaries — Net income attributable to the controlling interests $ 332,770 Capital expenditures $ 6,039 $ 5,742 $ 369 $ 12,150 Total assets $ 1,191,838 $ 1,333,146 $ 150,092 $ 2,675,076 Three Months Ended September 30, 2018 Office Multifamily Corporate and Other (1) Consolidated Real estate rental revenue $ 42,438 $ 23,953 $ 4,610 $ 71,001 Real estate expenses 15,368 9,297 1,323 25,988 Net operating income $ 27,070 $ 14,656 $ 3,287 $ 45,013 Depreciation and amortization (27,951 ) General and administrative expenses (5,267 ) Interest expense (12,342 ) Discontinued operations: Income from operations of properties sold or held for sale 6,440 Net income 5,893 Less: Net income attributable to noncontrolling interests in subsidiaries — Net income attributable to the controlling interests $ 5,893 Capital expenditures $ 8,537 $ 5,708 $ 1,259 $ 15,504 Total assets $ 1,246,026 $ 785,397 $ 385,094 $ 2,416,517 Nine Months Ended September 30, 2019 Office Multifamily Corporate and Other (1) Consolidated Real estate rental revenue $ 124,164 $ 90,012 $ 14,337 $ 228,513 Real estate expenses 45,937 34,928 4,104 84,969 Net operating income $ 78,227 $ 55,084 $ 10,233 $ 143,544 Depreciation and amortization (97,441 ) General and administrative (18,517 ) Leasing origination expense (1,286 ) Interest expense (41,946 ) Real estate impairment (8,374 ) Loss on sale of real estate (1,046 ) Discontinued operations: Income from operations of properties sold or held for sale 16,158 Gain on sale of real estate 339,024 Loss on extinguishment of debt (764 ) Net income 329,352 Less: Net income attributable to noncontrolling interests in subsidiaries — Net income attributable to the controlling interests $ 329,352 Capital expenditures $ 16,347 $ 12,841 $ 1,717 $ 30,905 Nine Months Ended September 30, 2018 Office Multifamily Corporate and Other (1) Consolidated Real estate rental revenue $ 135,258 $ 71,168 $ 13,564 $ 219,990 Real estate expenses 48,031 28,012 3,895 79,938 Net operating income $ 87,227 $ 43,156 $ 9,669 $ 140,052 Depreciation and amortization (83,134 ) General and administrative (16,737 ) Interest expense (38,155 ) Gain on sale of real estate 2,495 Real estate impairment (1,886 ) Loss on extinguishment of debt (1,178 ) Discontinued operations: Income from operations of properties sold or held for sale 18,485 Net income 19,942 Less: Net income attributable to noncontrolling interests in subsidiaries — Net income attributable to the controlling interests $ 19,942 Capital expenditures $ 17,926 $ 13,068 $ 3,069 $ 34,063 (1) Net operating income includes the retail properties not classified as discontinued operations: Takoma Park, Westminster, Concord Center, Chevy Chase Metro Plaza, 800 S. Washington Street, Randolph Shopping Center, Montrose Shopping Center and Spring Valley Village, and total assets and capital expenditures include all retail properties, including those classified as discontinued operations. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | SHAREHOLDERS' EQUITY On May 4, 2018, we entered into eight separate equity distribution agreements (collectively, the “Equity Distribution Agreements”) with each of Wells Fargo Securities, LLC, BNY Mellon Capital Markets, LLC, Capital One Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc. and SunTrust Robinson Humphrey, Inc. relating to the issuance of up to $250.0 million of our common shares from time to time. Issuances of our common shares are made at market prices prevailing at the time of issuance. We may use net proceeds from the issuance of common shares under this program for general corporate purposes, including, without limitation, working capital, the acquisition, renovation, expansion, improvement, development or redevelopment of income producing properties or the repayment of debt. During the 2019 Quarter and Period, we issued 0.1 million common shares at a weighted average price of $27.52 for net proceeds of $3.7 million . During the 2018 Quarter and Period, we issued 1.2 million common shares at a weighted average price of $31.18 for net proceeds of $35.5 million . We have a dividend reinvestment program, whereby shareholders may use their dividends and optional cash payments to purchase common shares. The common shares sold under this program may either be common shares issued by us or common shares purchased in the open market. Net proceeds under this program were used for general corporate purposes. Our issuances and net proceeds on the dividend reinvestment program were as follows (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Issuance of common shares 64 18 128 74 Weighted average price per share $ 27.67 $ 30.68 $ 26.97 $ 29.29 Net proceeds $ 1,757 $ 565 $ 3,430 $ 1,811 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Basis of Presentations (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | Pronouncements Adopted Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other significant Matters ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). This standard amends existing lease accounting standards for both lessees and lessors. Lessees must classify most leases as either finance or operating leases. For lease contracts, or contracts with an embedded lease, with a duration of more than one year in which we are the lessee, the present value of future lease payments are recognized on our consolidated balance sheets as a right-of-use asset and a corresponding lease liability. Leases (Topic 842) - Targeted Improvements (“ASU 2018-11”), which provides lessors optional transition relief from implementing this aspect of ASU 2016-02 if the following criteria are met: (1) both components have the same timing and pattern of revenue and (2) if accounted for separately, both components would be classified as an operating lease. We adopted the new standard as of January 1, 2019. We adopted ASU 2016-02 as of January 1, 2019 using the modified retrospective approach and by applying the transitional practical expedients noted below. Under the modified retrospective approach, we recognized a cumulative effect adjustment of $0.9 million to retained earnings as of January 1, 2019 (see note 4 for further discussion of the impact of adoption on our consolidated financial statements). We did not elect the hindsight expedient, which would have allowed us to reevaluate lease terms in calculating lease liabilities as part of adoption. Under ASU 2018-11, the FASB offered optional transition relief, if elected as a package, and applied consistently by an entity to all of its leases. Accordingly, upon adoption we elected, as a package, the practical expedients for all leases as follows: (1) we will not reassess whether any expired or existing contracts are or contain leases, (2) we will not reassess the lease classification for any expired or existing leases, and (3) we will not reassess initial direct costs for any existing leases. Pronouncements Not Yet Adopted Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other significant Matters ASU 2016-13, Measurement of Credit Losses on Financial Instruments . This standard requires financial assets measured at an amortized cost basis, including trade receivables, to be presented at the net amount expected to be collected. The new standard is effective for public entities for fiscal years beginning after December 15, 2019 and for interim periods therein, with adoption one year earlier permitted. We are currently evaluating the impact the new standard may have on our consolidated financial statements. ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software . This standard requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as assets. The standard is effective for public entities for fiscal years beginning after December 31, 2019 and for interim periods therein, with early adoption permitted. We are currently evaluating the impact the new standard may have on our consolidated financial statements. |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements include the consolidated accounts of WashREIT, our majority-owned subsidiaries and entities in which WashREIT has a controlling interest. All intercompany balances and transactions have been eliminated in consolidation. |
Basis of Accounting | We have prepared the accompanying unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information presented not misleading. In addition, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for the periods presented have been included. These unaudited financial statements should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2018 . Within these notes to the financial statements, we refer to the three months ended September 30, 2019 and September 30, 2018 as the “ 2019 Quarter” and the “ 2018 Quarter,” respectively, and the nine months ended September 30, 2019 and September 30, 2018 as the “ 2019 Period” and the “ 2018 Period,” respectively. |
Discontinued Operations | Discontinued Operations We classify properties as held for sale when they meet the necessary criteria, which include: (a) senior management commits to a plan to sell the assets, (b) the assets are available for immediate sale in their present condition subject only to terms that are usual and customary for sales of such assets, (c) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated, (d) the sale of the assets is probable, and transfer of the assets is expected to qualify for recognition as a completed sale, within one year, (e) the assets are being actively marketed for sale at a price that is reasonable in relation to its current fair value and (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Depreciation on these properties is discontinued at the time they are classified as held for sale, but operating revenues, operating expenses and interest expense continue to be recognized until the date of sale. Revenues and expenses of properties that are either sold or classified as held for sale are presented as discontinued operations for all periods presented in the consolidated statements of operations if the dispositions represent a strategic shift that has (or will have) a major effect on our operations and financial results. Interest on debt that can be identified as specifically attributed to these properties is included in discontinued operations. If the dispositions do not represent a strategic shift that has (or will have) a major effect on our operations and financial results, then the revenues and expenses of the properties that are classified as sold or held for sale are presented as continuing operations in the consolidated statements of operations for all periods presented. |
Restricted Cash | Restricted Cash Restricted cash includes funds escrowed for tenant security deposits, real estate tax, insurance and mortgage escrows and escrow deposits required by lenders on certain of our properties to be used for future building renovations or tenant improvements. |
Use of Estimates in the Financial Statements | Use of Estimates in the Financial Statements The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Real Estate (Tables)
Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate [Abstract] | |
Schedule of Real Estate Property Acquired | We acquired the following properties during the 2019 Period: Acquisition Date Property Type # of units (unaudited) Contract Purchase Price (in thousands) April 30, 2019 Assembly Portfolio - Virginia (1) Multifamily 1,685 $ 379,100 June 27, 2019 Assembly Portfolio - Maryland (2) Multifamily 428 82,070 July 23, 2019 Cascade at Landmark Multifamily 277 69,750 2,390 $ 530,920 (1) Consists of Assembly Alexandria, Assembly Manassas, Assembly Dulles, Assembly Leesburg, and Assembly Herndon. (2) Consists of Assembly Germantown and Assembly Watkins Mill. The Assembly Portfolio - Virginia and Assembly Portfolio - Maryland properties are collectively the “Assembly Portfolio.” |
Schedule of Revenue and Earnings of Acquired Properties | The results of operations from the 2019 acquisitions are included in the consolidated statements of operations as of their acquisition dates and are as follows: Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Real estate rental revenue $ 11,013 $ 16,467 Net loss (4,698 ) (8,179 ) |
Schedule of Cost of Acquisitions | The total cost of the 2019 acquisitions was as follows (in thousands): Assembly Portfolio Cascade at Landmark Total Contract purchase price $ 461,170 $ 69,750 $ 530,920 Credit to buyer (2,252 ) — (2,252 ) Capitalized acquisition costs 2,362 498 2,860 Total $ 461,280 $ 70,248 $ 531,528 |
Schedule of Acquisition Asset Valuation | We have recorded the total cost of the 2019 acquisitions as follows (in thousands): Land $ 92,391 Building 423,663 Absorption costs 15,474 Total $ 531,528 |
Schedule of Properties Held-for-Sale or Sold and Discontinued Operations | We sold the following properties during 2019 and 2018: Disposition Date Property Name Property Type Rentable Square Feet Contract Sales Price (Loss) Gain on Sale June 26, 2019 Quantico Corporate Center (1) Office 272,000 $ 33,000 $ (1,046 ) July 23, 2019 Shopping Center Portfolio (2) Retail 800,000 485,250 333,023 August 21, 2019 Frederick Crossing and Frederick County Square Retail 520,000 57,500 9,507 August 27, 2019 Centre at Hagerstown Retail 330,000 23,500 (3,506 ) Total 2019 1,922,000 $ 599,250 $ 337,978 January 19, 2018 Braddock Metro Center Office 356,000 $ 93,000 $ — June 28, 2018 2445 M Street Office 292,000 101,600 2,495 Total 2018 648,000 $ 194,600 $ 2,495 (1) Consists of 925 and 1000 Corporate Drive. (2) Consists of five retail properties: Gateway Overlook, Wheaton Park, Olney Village Center, Bradlee Shopping Center and Shoppes of Foxchase. The results of the Retail Portfolio are classified as discontinued operations and are summarized as follows (amounts in thousands, except for share data): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Real estate rental revenue $ 4,126 $ 11,500 $ 28,200 $ 33,998 Real estate expenses (1,095 ) (2,582 ) (6,803 ) (8,036 ) Depreciation and amortization (59 ) (2,321 ) (4,926 ) (6,985 ) Interest expense (30 ) (157 ) (313 ) (492 ) Loss on extinguishment of debt (764 ) — (764 ) — Gain on sale of real estate 339,024 — 339,024 — Income from discontinued operations $ 341,202 $ 6,440 $ 354,418 $ 18,485 Basic net income per share $ 4.24 $ 0.08 $ 4.41 $ 0.23 Diluted net income per share $ 4.24 $ 0.08 $ 4.41 $ 0.23 Capital expenditures $ — $ 1,020 $ 809 $ 1,834 All assets related to the Retail Portfolio were sold as of September 30, 2019 . As of December 31, 2018 , assets related to the Retail Portfolio were as follows (in thousands): December 31, 2018 Land $ 88,087 Income producing property 216,577 304,664 Accumulated depreciation and amortization (101,254 ) Income producing property, net 203,410 Rents and other receivables 9,898 Prepaid expenses and other assets 8,653 Total assets $ 221,961 All liabilities related to the Retail Portfolio were sold as of September 30, 2019 . As of December 31, 2018 , liabilities related to the Retail Portfolio were as follows (in thousands): December 31, 2018 Mortgage notes payable, net $ 11,515 Accounts payable and other liabilities 1,620 Advance rents 1,771 Tenant security deposits 612 Liabilities related to properties sold or held for sale $ 15,518 |
Lease Accounting (Tables)
Lease Accounting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Income | As of September 30, 2019 , non-cancelable commercial operating leases provide for future minimum rental income from continuing operations as follows (in thousands). Apartment leases are not included as the terms are generally for one year or less. 2019 $ 38,665 2020 153,366 2021 136,394 2022 122,558 2023 105,126 Thereafter 396,401 $ 952,510 |
Schedule of Future Minimum Rental Income at Prior Year End | As of December 31, 2018, non-cancelable commercial operating leases provide for future minimum rental income from continuing operations as follows (in thousands): 2019 $ 154,260 2020 143,566 2021 125,008 2022 108,688 2023 89,969 Thereafter 253,749 $ 875,240 |
Schedule of Obligations for Future Minimum Payments on Operating Ground Lease | The following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments on our operating ground lease as of September 30, 2019 and a reconciliation of those cash flows to the operating lease liability as of September 30, 2019 (in thousands): 2019 $ 65 2020 260 2021 260 2022 260 2023 260 2024 260 Thereafter 11,895 13,260 Imputed interest (9,229 ) Lease liability $ 4,031 |
Unsecured Line of Credit Paya_2
Unsecured Line of Credit Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Revolving Credit Facility | The amount of the Revolving Credit Facility’s unsecured line of credit unused and available at September 30, 2019 is as follows (in thousands): Committed capacity $ 700,000 Borrowings outstanding (211,000 ) Unused and available $ 489,000 We executed borrowings and repayments on the Revolving Credit Facility during the 2019 Period as follows (in thousands): Balance, December 31, 2018 $ 188,000 Borrowings 659,000 Repayments (636,000 ) Balance, September 30, 2019 $ 211,000 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Values of Interest Rate Swaps | The fair values of the interest rate swaps as of September 30, 2019 and December 31, 2018 , are as follows (in thousands): Fair Value Derivative Assets (Liabilities) Derivative Instrument Aggregate Notional Amount Effective Date Maturity Date September 30, 2019 December 31, 2018 Interest rate swaps $ 150,000 October 15, 2015 March 15, 2021 $ (140 ) $ 2,720 Interest rate swaps 150,000 March 31, 2017 July 21, 2023 1,007 7,918 Interest rate swaps 100,000 June 29, 2018 July 21, 2023 (4,526 ) (799 ) $ 400,000 $ (3,659 ) $ 9,839 |
Schedule of Net Gains or Losses on the Effective Swaps | The net gains or losses on the effective swaps are recognized in other comprehensive (loss) income, as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Unrealized (loss) gain on interest rate swaps $ (2,387 ) $ 1,474 $ (13,498 ) $ 7,762 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The fair values of these assets and liabilities at September 30, 2019 and December 31, 2018 were as follows (in thousands): September 30, 2019 December 31, 2018 Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Assets: SERP $ 1,636 $ — $ 1,636 $ — $ 1,364 $ — $ 1,364 $ — Interest rate swaps 1,007 — 1,007 — 10,638 — 10,638 — Liabilities: Interest rate swaps $ (4,666 ) $ — $ (4,666 ) $ — $ (799 ) $ — $ (799 ) $ — |
Schedule of Carrying Values and Estimated Fair Values of Financial Instruments | As of September 30, 2019 and December 31, 2018 , the carrying values and estimated fair values of our financial instruments were as follows (in thousands): September 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Cash and cash equivalents $ 12,931 $ 12,931 $ 6,016 $ 6,016 Restricted cash 1,578 1,578 1,624 1,624 Mortgage notes payable, net 47,319 48,259 48,277 48,368 Line of credit 211,000 211,000 188,000 188,000 Notes payable, net 996,455 1,025,248 995,397 1,015,210 September 30, 2019 and December 31, 2018 , the carrying values and estimated fair values of the mortgage note secured by Olney Village Center were as follows (in thousands): September 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Mortgage notes payable, net $ — $ — $ 11,515 $ 12,030 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of the Computation of Basic and Diluted Earnings per Share | The computations of basic and diluted earnings per share for the three and nine months ended September 30, 2019 and 2018 were as follows (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: (Loss) income from continuing operations $ (8,432 ) $ (547 ) $ (25,066 ) $ 1,457 Allocation of losses (earnings) to unvested restricted share awards to continuing operations 47 (144 ) 118 (432 ) Adjusted (loss) income from continuing operations attributable to the controlling interests (8,385 ) (691 ) (24,948 ) 1,025 Income from discontinued operations 341,202 6,440 354,418 18,485 Allocation of earnings to unvested restricted share awards to discontinued operations (1,841 ) — (1,870 ) — Adjusted income from discontinuing operations 339,361 6,440 352,548 18,485 Adjusted net income attributable to the controlling interests $ 330,976 $ 5,749 $ 327,600 $ 19,510 Denominator: Weighted average shares outstanding – basic 79,981 79,076 79,933 78,695 Effect of dilutive securities: Operating partnership units — — — 12 Employee restricted share awards — — — 95 Weighted average shares outstanding – diluted 79,981 79,076 79,933 78,802 Earnings per common share, basic: Continuing operations $ (0.10 ) $ (0.01 ) $ (0.31 ) $ 0.01 Discontinued operations 4.24 0.08 4.41 0.23 Basic net income attributable to the controlling interests per common share (1) $ 4.14 $ 0.07 $ 4.10 $ 0.25 Earnings per common share, diluted: Continuing operations $ (0.10 ) $ (0.01 ) $ (0.31 ) $ 0.01 Discontinued operations 4.24 0.08 4.41 0.23 Diluted net income attributable to the controlling interests per common share (1) $ 4.14 $ 0.07 $ 4.10 $ 0.25 Dividends declared per common share $ 0.30 $ 0.30 $ 0.90 $ 0.90 (1) Earnings per share may not sum due to rounding. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Reconciliation of Net Operating Income of Reportable Segments | The following tables present revenues, net operating income, capital expenditures and total assets for the three and nine months ended September 30, 2019 and 2018 from these segments, and reconcile net operating income of reportable segments to net income (loss) attributable to the controlling interests as reported (in thousands): Three Months Ended September 30, 2019 Office Multifamily Corporate and Other (1) Consolidated Real estate rental revenue $ 39,810 $ 35,790 $ 4,659 $ 80,259 Real estate expenses 15,148 14,232 1,312 30,692 Net operating income $ 24,662 $ 21,558 $ 3,347 $ 49,567 Depreciation and amortization (37,340 ) General and administrative expenses (6,045 ) Lease origination expenses (416 ) Interest expense (14,198 ) Discontinued operations: Income from operations of properties sold or held for sale 2,942 Gain on sale of real estate 339,024 Loss on extinguishment of debt (764 ) Net income 332,770 Less: Net income attributable to noncontrolling interests in subsidiaries — Net income attributable to the controlling interests $ 332,770 Capital expenditures $ 6,039 $ 5,742 $ 369 $ 12,150 Total assets $ 1,191,838 $ 1,333,146 $ 150,092 $ 2,675,076 Three Months Ended September 30, 2018 Office Multifamily Corporate and Other (1) Consolidated Real estate rental revenue $ 42,438 $ 23,953 $ 4,610 $ 71,001 Real estate expenses 15,368 9,297 1,323 25,988 Net operating income $ 27,070 $ 14,656 $ 3,287 $ 45,013 Depreciation and amortization (27,951 ) General and administrative expenses (5,267 ) Interest expense (12,342 ) Discontinued operations: Income from operations of properties sold or held for sale 6,440 Net income 5,893 Less: Net income attributable to noncontrolling interests in subsidiaries — Net income attributable to the controlling interests $ 5,893 Capital expenditures $ 8,537 $ 5,708 $ 1,259 $ 15,504 Total assets $ 1,246,026 $ 785,397 $ 385,094 $ 2,416,517 Nine Months Ended September 30, 2019 Office Multifamily Corporate and Other (1) Consolidated Real estate rental revenue $ 124,164 $ 90,012 $ 14,337 $ 228,513 Real estate expenses 45,937 34,928 4,104 84,969 Net operating income $ 78,227 $ 55,084 $ 10,233 $ 143,544 Depreciation and amortization (97,441 ) General and administrative (18,517 ) Leasing origination expense (1,286 ) Interest expense (41,946 ) Real estate impairment (8,374 ) Loss on sale of real estate (1,046 ) Discontinued operations: Income from operations of properties sold or held for sale 16,158 Gain on sale of real estate 339,024 Loss on extinguishment of debt (764 ) Net income 329,352 Less: Net income attributable to noncontrolling interests in subsidiaries — Net income attributable to the controlling interests $ 329,352 Capital expenditures $ 16,347 $ 12,841 $ 1,717 $ 30,905 Nine Months Ended September 30, 2018 Office Multifamily Corporate and Other (1) Consolidated Real estate rental revenue $ 135,258 $ 71,168 $ 13,564 $ 219,990 Real estate expenses 48,031 28,012 3,895 79,938 Net operating income $ 87,227 $ 43,156 $ 9,669 $ 140,052 Depreciation and amortization (83,134 ) General and administrative (16,737 ) Interest expense (38,155 ) Gain on sale of real estate 2,495 Real estate impairment (1,886 ) Loss on extinguishment of debt (1,178 ) Discontinued operations: Income from operations of properties sold or held for sale 18,485 Net income 19,942 Less: Net income attributable to noncontrolling interests in subsidiaries — Net income attributable to the controlling interests $ 19,942 Capital expenditures $ 17,926 $ 13,068 $ 3,069 $ 34,063 (1) Net operating income includes the retail properties not classified as discontinued operations: Takoma Park, Westminster, Concord Center, Chevy Chase Metro Plaza, 800 S. Washington Street, Randolph Shopping Center, Montrose Shopping Center and Spring Valley Village, and total assets and capital expenditures include all retail properties, including those classified as discontinued operations. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Dividend Reinvestment Program Activity | Our issuances and net proceeds on the dividend reinvestment program were as follows (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Issuance of common shares 64 18 128 74 Weighted average price per share $ 27.67 $ 30.68 $ 26.97 $ 29.29 Net proceeds $ 1,757 $ 565 $ 3,430 $ 1,811 |
Nature of Business - Narrative
Nature of Business - Narrative (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019USD ($)property | Sep. 30, 2019USD ($)propertysegment | Dec. 31, 2018USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of retail properties sold | property | 8 | ||
Number of reportable segments | segment | 2 | ||
Percentage of distribution of ordinary taxable income | 90.00% | ||
Number of retail properties sold that were identified for deferred exchange under Section 1031 | property | 7 | ||
Number of multifamily properties acquired | property | 8 | ||
Deferred tax liabilities | $ | $ 600,000 | $ 600,000 | $ 600,000 |
Taxable Reit Subsidiary | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Deferred tax asset | $ | 1,400,000 | 1,400,000 | 1,400,000 |
Deferred tax asset, net of valuation allowance | $ | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Basis of Presentations - Pronouncements Adopted (Details) $ in Thousands | Jan. 01, 2019USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect adjustment upon adoption of new accounting standard | $ 906 |
ASU No. 2016-02 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect adjustment upon adoption of new accounting standard | $ 900 |
Real Estate - Schedule of Acqui
Real Estate - Schedule of Acquisitions (Details) $ in Thousands | Jul. 23, 2019USD ($)unit | Jun. 27, 2019USD ($)unit | Apr. 30, 2019USD ($)unit | Sep. 30, 2019USD ($)unit |
Real Estate [Line Items] | ||||
Contract Purchase Price | $ 530,920 | |||
Assembly Portfolio Virginia | ||||
Real Estate [Line Items] | ||||
Number of Units (unaudited) | unit | 1,685 | |||
Contract Purchase Price | $ 379,100 | |||
Assembly Portfolio Maryland | ||||
Real Estate [Line Items] | ||||
Number of Units (unaudited) | unit | 428 | |||
Contract Purchase Price | $ 82,070 | |||
Cascade at Landmark | ||||
Real Estate [Line Items] | ||||
Number of Units (unaudited) | unit | 277 | |||
Contract Purchase Price | $ 69,750 | $ 69,750 | ||
2019 Acquisitions | ||||
Real Estate [Line Items] | ||||
Number of Units (unaudited) | unit | 2,390 | |||
Contract Purchase Price | $ 530,920 |
Real Estate - Schedule of Reven
Real Estate - Schedule of Revenue and Earnings for Acquired Properties (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Real Estate [Line Items] | ||||
Real estate rental revenue | $ 80,259 | $ 71,001 | $ 228,513 | $ 219,990 |
Net loss | 332,770 | $ 5,893 | 329,352 | $ 19,942 |
2019 Acquisitions | ||||
Real Estate [Line Items] | ||||
Real estate rental revenue | 11,013 | 16,467 | ||
Net loss | $ (4,698) | $ (8,179) |
Real Estate - Schedule of Cost
Real Estate - Schedule of Cost of Acquisition (Details) - USD ($) $ in Thousands | Jul. 23, 2019 | Sep. 30, 2019 |
Real Estate [Line Items] | ||
Contract purchase price | $ 530,920 | |
Credit to buyer | (2,252) | |
Capitalized acquisition costs | 2,860 | |
Total cost | 531,528 | |
Assembly Portfolio | ||
Real Estate [Line Items] | ||
Contract purchase price | 461,170 | |
Credit to buyer | (2,252) | |
Capitalized acquisition costs | 2,362 | |
Total cost | 461,280 | |
Cascade at Landmark | ||
Real Estate [Line Items] | ||
Contract purchase price | $ 69,750 | 69,750 |
Credit to buyer | 0 | |
Capitalized acquisition costs | 498 | |
Total cost | $ 70,248 |
Real Estate - Schedule of Acq_2
Real Estate - Schedule of Acquisition Cost Allocation (Details) - 2019 Acquisitions $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Real Estate [Line Items] | |
Total | $ 531,528 |
Absorption costs | |
Real Estate [Line Items] | |
Absorption costs | 15,474 |
Land | |
Real Estate [Line Items] | |
Property, plant and equipment | 92,391 |
Building | |
Real Estate [Line Items] | |
Property, plant and equipment | $ 423,663 |
Real Estate - Acquisitions and
Real Estate - Acquisitions and Development/Redevelopment Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Real Estate [Line Items] | |||
Capitalized acquisition costs | $ 2,860 | ||
Total cost of acquisition | 531,528 | ||
Real estate acquisitions, net | 528,600 | ||
Credits received at settlement | 2,900 | ||
Properties under development or held for future development | $ 110,572 | $ 87,231 | 110,572 |
The Trove | |||
Real Estate [Line Items] | |||
Properties under development or held for future development | 95,700 | 95,700 | |
Assets placed into service | 12,000 | ||
Riverside Developments | |||
Real Estate [Line Items] | |||
Properties under development or held for future development | 24,200 | 24,200 | |
Spring Valley Village Retail Center | |||
Real Estate [Line Items] | |||
Properties under development or held for future development | $ 6,500 | $ 6,500 | |
Assets placed into service | $ 4,200 | ||
Leasing Commissions/Absorption Costs | |||
Real Estate [Line Items] | |||
Weighted remaining average life (in months) | 2 months |
Real Estate - Properties Sold a
Real Estate - Properties Sold and Held for Sale (Details) $ in Thousands | Aug. 27, 2019USD ($)ft² | Aug. 21, 2019USD ($)ft² | Jul. 23, 2019USD ($)ft²property | Jun. 26, 2019USD ($)ft² | Jun. 28, 2018USD ($)ft² | Jan. 19, 2018USD ($)ft² | Sep. 30, 2019USD ($)ft² | Sep. 30, 2018USD ($)ft² | Sep. 30, 2019USD ($)ft² | Sep. 30, 2018USD ($)ft² | Apr. 22, 2019USD ($) | Mar. 31, 2019ft² | Mar. 31, 2018ft² |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
(Loss) gain on sale of real estate | $ 0 | $ 0 | $ (1,046) | $ 2,495 | |||||||||
(Loss) gain on sale of real estate | $ 339,024 | $ 0 | $ 339,024 | $ 0 | |||||||||
Quantico Corporate Center | Office Building | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Rentable Square Feet | ft² | 272,000 | ||||||||||||
Contract Sales Price | $ 33,000 | ||||||||||||
(Loss) gain on sale of real estate | $ (1,000) | ||||||||||||
Shopping Center Portfolio | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
(Loss) gain on sale of real estate | $ 333,000 | ||||||||||||
Frederick Crossing and Frederick County Square | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
(Loss) gain on sale of real estate | $ 9,500 | ||||||||||||
Centre at Hagerstown | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
(Loss) gain on sale of real estate | $ (3,500) | ||||||||||||
2445 M Street | Office Building | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Contract Sales Price | $ 101,600 | ||||||||||||
(Loss) gain on sale of real estate | $ 2,500 | ||||||||||||
2019 Properties Sold Group | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Rentable Square Feet | ft² | 1,922,000 | 1,922,000 | |||||||||||
Contract Sales Price | $ 599,250 | $ 599,250 | |||||||||||
(Loss) gain on sale of real estate | $ 337,978 | ||||||||||||
2019 Properties Sold Group | Disposal group, not discontinued operations | Quantico Corporate Center | Office Building | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Rentable Square Feet | ft² | 272,000 | ||||||||||||
Contract Sales Price | $ 33,000 | ||||||||||||
(Loss) gain on sale of real estate | $ (1,046) | ||||||||||||
2019 Properties Sold Group | Discontinued operations | Shopping Center Portfolio | Retail | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Rentable Square Feet | ft² | 800,000 | ||||||||||||
Contract Sales Price | $ 485,250 | ||||||||||||
(Loss) gain on sale of real estate | $ 333,023 | ||||||||||||
Number of properties | property | 5 | ||||||||||||
2019 Properties Sold Group | Discontinued operations | Frederick Crossing and Frederick County Square | Retail | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Rentable Square Feet | ft² | 520,000 | ||||||||||||
Contract Sales Price | $ 57,500 | ||||||||||||
(Loss) gain on sale of real estate | $ 9,507 | ||||||||||||
2019 Properties Sold Group | Discontinued operations | Centre at Hagerstown | Retail | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Rentable Square Feet | ft² | 330,000 | ||||||||||||
Contract Sales Price | $ 23,500 | ||||||||||||
(Loss) gain on sale of real estate | $ (3,506) | ||||||||||||
2018 Properties Sold Group | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Rentable Square Feet | ft² | 648,000 | 648,000 | |||||||||||
Contract Sales Price | $ 194,600 | $ 194,600 | |||||||||||
(Loss) gain on sale of real estate | $ 2,495 | ||||||||||||
2018 Properties Sold Group | 2445 M Street | Office Building | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Rentable Square Feet | ft² | 292,000 | ||||||||||||
2018 Properties Sold Group | Disposal group, not discontinued operations | Braddock Metro Center | Office Building | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Rentable Square Feet | ft² | 356,000 | ||||||||||||
Contract Sales Price | $ 93,000 | ||||||||||||
(Loss) gain on sale of real estate | $ 0 | ||||||||||||
2018 Properties Sold Group | Disposal group, not discontinued operations | 2445 M Street | Office Building | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Rentable Square Feet | ft² | 292,000 | ||||||||||||
Contract Sales Price | $ 101,600 | ||||||||||||
(Loss) gain on sale of real estate | $ 2,495 |
Real Estate - Properties Sold_2
Real Estate - Properties Sold and Held for Sale Narrative (Details) $ in Thousands | Aug. 27, 2019USD ($) | Aug. 21, 2019USD ($) | Jul. 23, 2019USD ($) | Jun. 26, 2019USD ($) | Jun. 28, 2018USD ($) | Jun. 30, 2019agreementbuyer | Sep. 30, 2019USD ($) | Mar. 31, 2019USD ($)ft²buildings | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Apr. 22, 2019USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Real estate impairment | $ 0 | $ 0 | $ 8,374 | $ 1,886 | ||||||||||
(Loss) gain on sale of real estate | 0 | 0 | (1,046) | 2,495 | ||||||||||
(Loss) gain on sale of real estate | 339,024 | 0 | 339,024 | 0 | ||||||||||
Loss on extinguishment of debt | $ 764 | $ 0 | $ 764 | $ 0 | ||||||||||
2445 M Street | Office Building | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Initial contracted sales price | $ 100,000 | |||||||||||||
Real estate impairment | $ 1,900 | $ 24,100 | ||||||||||||
Contract sales price | $ 101,600 | |||||||||||||
(Loss) gain on sale of real estate | $ 2,500 | |||||||||||||
Quantico Corporate Center | Office Building | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Number of buildings | buildings | 2 | |||||||||||||
Rentable square feet | ft² | 272,000 | |||||||||||||
Real estate impairment | $ 8,400 | |||||||||||||
Contract sales price | $ 33,000 | |||||||||||||
(Loss) gain on sale of real estate | $ (1,000) | |||||||||||||
Shopping Center Portfolio and Power Center Portfolio | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Number of purchase and sale agreements | agreement | 2 | |||||||||||||
Number of buyers | buyer | 2 | |||||||||||||
Shopping Center Portfolio | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
(Loss) gain on sale of real estate | $ 333,000 | |||||||||||||
Frederick Crossing and Frederick County Square | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
(Loss) gain on sale of real estate | $ 9,500 | |||||||||||||
Centre at Hagerstown | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
(Loss) gain on sale of real estate | $ (3,500) |
Real Estate - Discontinued Oper
Real Estate - Discontinued Operations Results of Retail Portfolio (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Results of Discontinued Operations | ||||
Loss on extinguishment of debt | $ (764) | $ 0 | $ (764) | $ 0 |
Gain on sale of real estate | 339,024 | 0 | 339,024 | 0 |
Income from discontinued operations | $ 341,202 | $ 6,440 | $ 354,418 | $ 18,485 |
Discontinued operations, basic (in dollars per share) | $ 4.24 | $ 0.08 | $ 4.41 | $ 0.23 |
Discontinued operations, diluted (in dollars per share) | $ 4.24 | $ 0.08 | $ 4.41 | $ 0.23 |
Retail Portfolio | Discontinued Operations | ||||
Results of Discontinued Operations | ||||
Real estate rental revenue | $ 4,126 | $ 11,500 | $ 28,200 | $ 33,998 |
Real estate expenses | (1,095) | (2,582) | (6,803) | (8,036) |
Depreciation and amortization | (59) | (2,321) | (4,926) | (6,985) |
Interest expense | (30) | (157) | (313) | (492) |
Loss on extinguishment of debt | (764) | 0 | (764) | 0 |
Gain on sale of real estate | 339,024 | 0 | 339,024 | 0 |
Income from discontinued operations | 341,202 | 6,440 | 354,418 | 18,485 |
Capital expenditures | $ 0 | $ 1,020 | $ 809 | $ 1,834 |
Real Estate - Discontinued Op_2
Real Estate - Discontinued Operations Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets - Discontinued Operations | ||
Land | $ 611,797 | $ 526,572 |
Income producing property | 2,486,966 | 2,055,349 |
Net income producing property, at cost | 3,098,763 | 2,581,921 |
Accumulated depreciation and amortization | (724,433) | (669,281) |
Net income producing property | 2,374,330 | 1,912,640 |
Rents and other receivables | 69,414 | 63,962 |
Prepaid expenses and other assets | 106,251 | 123,670 |
Liabilities - Discontinued Operations | ||
Mortgage notes payable, net | 47,319 | 48,277 |
Accounts payable and other liabilities | 75,735 | 57,946 |
Advance rents | 9,475 | 9,965 |
Tenant security deposits | 10,849 | 9,501 |
Liabilities related to properties sold or held for sale | $ 0 | 15,518 |
Retail Portfolio | Discontinued Operations | ||
Assets - Discontinued Operations | ||
Land | 88,087 | |
Income producing property | 216,577 | |
Net income producing property, at cost | 304,664 | |
Accumulated depreciation and amortization | (101,254) | |
Net income producing property | 203,410 | |
Rents and other receivables | 9,898 | |
Prepaid expenses and other assets | 8,653 | |
Total assets | 221,961 | |
Liabilities - Discontinued Operations | ||
Mortgage notes payable, net | 11,515 | |
Accounts payable and other liabilities | 1,620 | |
Advance rents | 1,771 | |
Tenant security deposits | 612 | |
Liabilities related to properties sold or held for sale | $ 15,518 |
Lease Accounting - Leasing as a
Lease Accounting - Leasing as a Lessor Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Lessor, Lease, Description [Line Items] | ||
Cumulative effect adjustment upon adoption of new accounting standard | $ 906 | |
ASU No. 2016-02 | ||
Lessor, Lease, Description [Line Items] | ||
Cumulative effect adjustment upon adoption of new accounting standard | $ 900 | |
Multifamily Properties | ||
Lessor, Lease, Description [Line Items] | ||
Lessor operating lease terms (in years) | 1 year | |
Commercial Office and Retail Properties | ||
Lessor, Lease, Description [Line Items] | ||
Lessor operating lease terms (in years) | 7 years |
Lease Accounting - Schedule of
Lease Accounting - Schedule of Future Minimum Rental Income (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Future Minimum Rental Income | |
2019 | $ 38,665 |
2020 | 153,366 |
2021 | 136,394 |
2022 | 122,558 |
2023 | 105,126 |
Thereafter | 396,401 |
Total | $ 952,510 |
Lease Accounting - Schedule o_2
Lease Accounting - Schedule of Future Minimum Rental Income at Prior Year End (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Future Minimum Rental Income - Prior Year End | |
2019 | $ 154,260 |
2020 | 143,566 |
2021 | 125,008 |
2022 | 108,688 |
2023 | 89,969 |
Thereafter | 253,749 |
Total | $ 875,240 |
Lease Accounting - Leasing as_2
Lease Accounting - Leasing as a Lessee Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Leases [Line Items] | ||||||
Operating ground lease remaining lease term (in years) | 52 years | 52 years | ||||
Variable rental payments | $ 300 | $ 300 | $ 900 | $ 800 | ||
Lease liability | $ 4,031 | $ 4,031 | ||||
Operating lease discount rate | 5.90% | 5.90% | ||||
Right-of-use asset and lease liability amortization | $ 100 | $ 200 | ||||
ASU No. 2016-02 | ||||||
Leases [Line Items] | ||||||
Right-of-use asset | $ 4,200 | |||||
Lease liability | 4,200 | |||||
Below-market ground lease | ||||||
Leases [Line Items] | ||||||
Accumulated amortization on below-market ground lease intangible asset prior to reclassification | $ 2,100 | |||||
Below-market ground lease | Reclassification adjustment | ASU No. 2016-02 | ||||||
Leases [Line Items] | ||||||
Below-market ground lease intangible asset reclassified | $ 10,000 |
Lease Accounting - Schedule o_3
Lease Accounting - Schedule of Obligations for Future Minimum Payments on Operating Ground Lease (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Obligations for Future Minimum Payments on Operating Ground Lease | |
2019 | $ 65 |
2020 | 260 |
2021 | 260 |
2022 | 260 |
2023 | 260 |
2024 | 260 |
Thereafter | 11,895 |
Total minimum payments due | 13,260 |
Imputed interest | (9,229) |
Lease liability | $ 4,031 |
Unsecured Line of Credit Paya_3
Unsecured Line of Credit Payable - Narrative (Details) | Sep. 30, 2019USD ($) | Mar. 31, 2018USD ($)extension_option | Sep. 30, 2019USD ($) | Mar. 29, 2018USD ($) | Sep. 15, 2015USD ($) |
Line of Credit Facility [Line Items] | |||||
One-month LIBOR (percent) | 2.02% | 2.02% | |||
Interest Rate Swap | |||||
Line of Credit Facility [Line Items] | |||||
Derivative notional amount | $ 400,000,000 | $ 400,000,000 | |||
Credit Agreement 2018 | |||||
Line of Credit Facility [Line Items] | |||||
Credit agreement, aggregate maximum borrowing capacity including accordion feature | $ 1,500,000,000 | ||||
2015 Term Loan | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face amount | $ 150,000,000 | ||||
2015 Term Loan | Interest Rate Swap | |||||
Line of Credit Facility [Line Items] | |||||
Derivative notional amount | 150,000,000 | 150,000,000 | $ 150,000,000 | ||
Derivative, fixed interest rate (percent) | 2.72% | ||||
2018 Term Loan | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face amount | $ 250,000,000 | ||||
2018 Term Loan | Interest Rate Swap | |||||
Line of Credit Facility [Line Items] | |||||
Derivative, fixed interest rate (percent) | 2.87% | 2.87% | |||
2018 Term Loan A | Interest Rate Swap | |||||
Line of Credit Facility [Line Items] | |||||
Derivative notional amount | 150,000,000 | $ 150,000,000 | 150,000,000 | $ 150,000,000 | |
Derivative, fixed interest rate (percent) | 2.31% | 2.31% | |||
2018 Term Loan B | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face amount | $ 100,000,000 | ||||
2018 Term Loan B | Interest Rate Swap | |||||
Line of Credit Facility [Line Items] | |||||
Derivative notional amount | 100,000,000 | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | |
Derivative, fixed interest rate (percent) | 3.71% | 3.71% | |||
Term Loan | 2015 Term Loan | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face amount | $ 150,000,000 | ||||
Term Loan | 2018 Term Loan | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face amount | 250,000,000 | ||||
Term Loan | 2018 Term Loan | LIBOR | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 0.85% | ||||
Term Loan | 2018 Term Loan | LIBOR | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 1.75% | ||||
Term Loan | 2018 Term Loan | Base Rate | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 0.00% | ||||
Term Loan | 2018 Term Loan | Base Rate | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 0.75% | ||||
Term Loan | 2018 Term Loan A | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face amount | 150,000,000 | $ 150,000,000 | |||
Term Loan | 2018 Term Loan B | |||||
Line of Credit Facility [Line Items] | |||||
Proceeds from issuance of long-term debt | 100,000,000 | ||||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Revolving credit facility borrowing capacity | $ 700,000,000 | $ 700,000,000 | $ 700,000,000 | ||
Debt instrument, term (in years) | 4 years | ||||
Debt instrument, maturity date | Mar. 29, 2022 | ||||
Number of extensions allowed | extension_option | 2 | ||||
Term of allowable extensions (in months) | 6 months | ||||
Commitment fee (percent) | 0.20% | ||||
Revolving Credit Facility | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Commitment fee (percent) | 0.10% | ||||
Revolving Credit Facility | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Commitment fee (percent) | 0.30% | ||||
Revolving Credit Facility | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 1.00% | ||||
Base rate component, spread on variable rate (percent) | 1.00% | ||||
Revolving Credit Facility | LIBOR | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 0.775% | ||||
Revolving Credit Facility | LIBOR | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 1.55% | ||||
Revolving Credit Facility | Base Rate | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 0.00% | ||||
Revolving Credit Facility | Base Rate | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 0.55% | ||||
Revolving Credit Facility | Federal Funds Rate | |||||
Line of Credit Facility [Line Items] | |||||
Base rate component, spread on variable rate (percent) | 0.50% |
Unsecured Line of Credit Paya_4
Unsecured Line of Credit Payable - Schedule of Revolving Credit Facility Unused and Available Credit (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Line of Credit Facility [Line Items] | |||
Borrowings outstanding | $ (211,000,000) | $ (188,000,000) | |
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Committed capacity | 700,000,000 | $ 700,000,000 | |
Borrowings outstanding | (211,000,000) | $ (188,000,000) | |
Unused and available | $ 489,000,000 |
Unsecured Line of Credit Paya_5
Unsecured Line of Credit Payable - Schedule of Revolving Credit Facility Borrowings and Repayments (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Line of Credit [Roll Forward] | ||
Balance, December 31, 2018 | $ 188,000 | |
Borrowings | 23,000 | $ 17,000 |
Balance, September 30, 2019 | 211,000 | |
Revolving Credit Facility | ||
Line of Credit [Roll Forward] | ||
Balance, December 31, 2018 | 188,000 | |
Borrowings | 659,000 | |
Repayments | (636,000) | |
Balance, September 30, 2019 | $ 211,000 |
Notes Payable (Details)
Notes Payable (Details) - Term Loan - 2019 Term Loan - USD ($) | Apr. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2019 |
Short-term Debt [Line Items] | |||
Debt instrument, term (in years) | 6 months | ||
Debt instrument, face amount | $ 450,000,000 | ||
Debt instrument, maturity date | Oct. 30, 2019 | ||
Repayment of borrowings | $ 450,000,000 | ||
LIBOR | |||
Short-term Debt [Line Items] | |||
Base rate component, spread on variable rate (percent) | 1.00% | ||
Basis point component of interest rate at Company's election (percent) | 1.00% | ||
LIBOR | Minimum | |||
Short-term Debt [Line Items] | |||
Basis spread on variable rate (percent) | 0.75% | ||
LIBOR | Maximum | |||
Short-term Debt [Line Items] | |||
Basis spread on variable rate (percent) | 1.65% | ||
Base Rate | Minimum | |||
Short-term Debt [Line Items] | |||
Basis spread on variable rate (percent) | 0.00% | ||
Base Rate | Maximum | |||
Short-term Debt [Line Items] | |||
Basis spread on variable rate (percent) | 0.65% | ||
Federal Funds Rate | |||
Short-term Debt [Line Items] | |||
Base rate component, spread on variable rate (percent) | 0.50% |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) | 9 Months Ended | ||||
Sep. 30, 2019USD ($) | Mar. 31, 2018USD ($) | Mar. 29, 2018USD ($)arrangement | Jul. 22, 2016USD ($)arrangement | Sep. 15, 2015USD ($)arrangement | |
Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Derivative notional amount | $ 400,000,000 | ||||
Estimated amount to be reclassified within next twelve months as an increase to interest expense | 300,000 | ||||
Derivative assets | 1,000,000 | ||||
Derivative liabilities | 4,700,000 | ||||
2015 Term Loan | |||||
Derivative [Line Items] | |||||
Debt instrument, face amount | $ 150,000,000 | ||||
2015 Term Loan | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Number of derivative instruments | arrangement | 2 | ||||
Derivative notional amount | 150,000,000 | $ 150,000,000 | |||
Derivative fixed interest rate (percent) | 2.72% | ||||
2016 Term Loan | |||||
Derivative [Line Items] | |||||
Debt instrument, face amount | $ 150,000,000 | ||||
2016 Term Loan | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Number of derivative instruments | arrangement | 2 | ||||
Derivative notional amount | $ 150,000,000 | ||||
Derivative fixed interest rate (percent) | 2.86% | ||||
2018 Term Loan | |||||
Derivative [Line Items] | |||||
Debt instrument, face amount | $ 250,000,000 | ||||
2018 Term Loan | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Derivative fixed interest rate (percent) | 2.87% | 2.87% | |||
2018 Term Loan A | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Derivative notional amount | 150,000,000 | $ 150,000,000 | $ 150,000,000 | ||
Derivative fixed interest rate (percent) | 2.31% | 2.31% | |||
2018 Term Loan B | |||||
Derivative [Line Items] | |||||
Debt instrument, face amount | $ 100,000,000 | ||||
2018 Term Loan B | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Number of derivative instruments | arrangement | 4 | ||||
Derivative notional amount | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | ||
Derivative fixed interest rate (percent) | 3.71% | 3.71% |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Fair Value of Interest Rate Swaps (Details) - Interest Rate Swap - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Mar. 29, 2018 | Sep. 15, 2015 |
Derivatives, Fair Value [Line Items] | |||||
Aggregate Notional Amount | $ 400,000,000 | ||||
Derivative Assets (Liabilities) | (3,659,000) | $ 9,839,000 | |||
2015 Term Loan | |||||
Derivatives, Fair Value [Line Items] | |||||
Aggregate Notional Amount | 150,000,000 | $ 150,000,000 | |||
2015 Term Loan | Accounts Payable and Other Liabilities | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Assets (Liabilities) | (140,000) | ||||
2015 Term Loan | Prepaid Expenses and Other Assets | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Assets (Liabilities) | 2,720,000 | ||||
2018 Term Loan A | |||||
Derivatives, Fair Value [Line Items] | |||||
Aggregate Notional Amount | 150,000,000 | $ 150,000,000 | $ 150,000,000 | ||
2018 Term Loan A | Prepaid Expenses and Other Assets | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Assets (Liabilities) | 1,007,000 | 7,918,000 | |||
2018 Term Loan B | |||||
Derivatives, Fair Value [Line Items] | |||||
Aggregate Notional Amount | 100,000,000 | $ 100,000,000 | $ 100,000,000 | ||
2018 Term Loan B | Accounts Payable and Other Liabilities | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Assets (Liabilities) | $ (4,526,000) | $ (799,000) |
Derivative Instruments - Sche_2
Derivative Instruments - Schedule of Net Gains and Losses on Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized (loss) gain on interest rate swaps | $ (2,387) | $ 1,474 | $ (13,498) | $ 7,762 |
Interest Rate Swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized (loss) gain on interest rate swaps | $ (2,387) | $ 1,474 | $ (13,498) | $ 7,762 |
Fair Value Disclosures - Assets
Fair Value Disclosures - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Interest Rate Swap | ||
Assets: | ||
Interest rate swaps | $ 1,000 | |
Liabilities: | ||
Interest rate swaps | (4,700) | |
Recurring | SERP | ||
Assets: | ||
SERP | 1,636 | $ 1,364 |
Recurring | Interest Rate Swap | ||
Assets: | ||
Interest rate swaps | 1,007 | 10,638 |
Liabilities: | ||
Interest rate swaps | (4,666) | (799) |
Recurring | Level 1 | SERP | ||
Assets: | ||
SERP | 0 | 0 |
Recurring | Level 1 | Interest Rate Swap | ||
Assets: | ||
Interest rate swaps | 0 | 0 |
Liabilities: | ||
Interest rate swaps | 0 | 0 |
Recurring | Level 2 | SERP | ||
Assets: | ||
SERP | 1,636 | 1,364 |
Recurring | Level 2 | Interest Rate Swap | ||
Assets: | ||
Interest rate swaps | 1,007 | 10,638 |
Liabilities: | ||
Interest rate swaps | (4,666) | (799) |
Recurring | Level 3 | SERP | ||
Assets: | ||
SERP | 0 | 0 |
Recurring | Level 3 | Interest Rate Swap | ||
Assets: | ||
Interest rate swaps | 0 | 0 |
Liabilities: | ||
Interest rate swaps | $ 0 | $ 0 |
Fair Value Disclosures - Financ
Fair Value Disclosures - Financial Assets and Liabilities Not Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Carrying Value | ||
Carrying Value and Estimated Fair Values [Line Items] | ||
Cash and cash equivalents | $ 12,931 | $ 6,016 |
Restricted cash | 1,578 | 1,624 |
Mortgage notes payable, net | 47,319 | 48,277 |
Line of credit | 211,000 | 188,000 |
Notes payable, net | 996,455 | 995,397 |
Fair Value | ||
Carrying Value and Estimated Fair Values [Line Items] | ||
Cash and cash equivalents | 12,931 | 6,016 |
Restricted cash | 1,578 | 1,624 |
Mortgage notes payable, net | 48,259 | 48,368 |
Line of credit | 211,000 | 188,000 |
Notes payable, net | 1,025,248 | 1,015,210 |
Olney Village Center | Carrying Value | ||
Carrying Value and Estimated Fair Values [Line Items] | ||
Mortgage notes payable, net | 0 | 11,515 |
Olney Village Center | Fair Value | ||
Carrying Value and Estimated Fair Values [Line Items] | ||
Mortgage notes payable, net | $ 0 | $ 12,030 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 1.7 | $ 1.7 | $ 6.3 | $ 5.1 |
Washington Real Estate Investment Trust 2016 Omnibus Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate number of shares authorized for stock based awards (in shares) | 2,400,000 | 2,400,000 | ||
Stock based plan, period in effect (in years) | 10 years | |||
Restricted Share Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of share awards vested | $ 1.7 | $ 1.1 | ||
Total unvested restricted share awards (in shares) | 428,840 | 428,840 | ||
Weighted average grant date fair value (in dollars per share) | $ 28.08 | $ 28.08 | ||
Total compensation cost related to unvested restricted share awards | $ 7 | $ 7 | ||
Total compensation cost related to unvested restricted share awards, expected period for recognition (in months) | 24 months |
Earnings per Common Share - Com
Earnings per Common Share - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Numerator: | |||||
(Loss) income from continuing operations | $ (8,432) | $ (547) | $ (25,066) | $ 1,457 | |
Allocation of losses (earnings) to unvested restricted share awards to continuing operations | 47 | (144) | 118 | (432) | |
Adjusted (loss) income from continuing operations attributable to the controlling interests | (8,385) | (691) | (24,948) | 1,025 | |
Income from discontinued operations | 341,202 | 6,440 | 354,418 | 18,485 | |
Allocation of earnings to unvested restricted share awards to discontinued operations | (1,841) | 0 | (1,870) | 0 | |
Adjusted income from discontinuing operations | 339,361 | 6,440 | 352,548 | 18,485 | |
Adjusted net income attributable to the controlling interests | $ 330,976 | $ 5,749 | $ 327,600 | $ 19,510 | |
Denominator: | |||||
Weighted average shares outstanding - basic (in shares) | 79,981 | 79,076 | 79,933 | 78,695 | |
Operating partnership units (in shares) | 0 | 0 | 0 | 12 | |
Employee restricted share awards (in shares) | 0 | 0 | 0 | 95 | |
Weighted average shares outstanding - diluted (in shares) | 79,981 | 79,076 | 79,933 | 78,802 | |
Earnings per common share, basic: | |||||
Continuing operations, basic (in dollars per share) | $ (0.10) | $ (0.01) | $ (0.31) | $ 0.01 | |
Discontinued operations, basic (in dollars per share) | 4.24 | 0.08 | 4.41 | 0.23 | |
Basic net income attributable to the controlling interests per common share (in dollars per share) | [1] | 4.14 | 0.07 | 4.10 | 0.25 |
Earnings per common share, diluted: | |||||
Continuing operations, diluted (in dollars per share) | (0.10) | (0.01) | (0.31) | 0.01 | |
Discontinued operations, diluted (in dollars per share) | 4.24 | 0.08 | 4.41 | 0.23 | |
Diluted net income attributable to the controlling interests per common share (in dollars per share) | [1] | 4.14 | 0.07 | 4.10 | 0.25 |
Dividends declared per common share: | |||||
Dividends declared per common share (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.90 | $ 0.90 | |
[1] | Earnings per share may not sum due to rounding |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019property | Sep. 30, 2019segment | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 2 | |
Number of retail properties sold | property | 8 |
Segment Information - Segment S
Segment Information - Segment Schedules (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||
Real estate rental revenue | $ 80,259 | $ 71,001 | $ 228,513 | $ 219,990 | |
Real estate expenses | 30,692 | 25,988 | 84,969 | 79,938 | |
Net operating income | 49,567 | 45,013 | 143,544 | 140,052 | |
Depreciation and amortization | (37,340) | (27,951) | (97,441) | (83,134) | |
General and administrative expenses | (6,045) | (5,267) | (18,517) | (16,737) | |
Lease origination expenses | (416) | 0 | (1,286) | 0 | |
Interest expense | (14,198) | (12,342) | (41,946) | (38,155) | |
(Loss) gain on sale of real estate | 0 | 0 | (1,046) | 2,495 | |
Real estate impairment | 0 | 0 | (8,374) | (1,886) | |
Loss on extinguishment of debt | 0 | 0 | 0 | (1,178) | |
Income from operations of properties sold or held for sale | 2,942 | 6,440 | 16,158 | 18,485 | |
Gain on sale of real estate | 339,024 | 0 | 339,024 | 0 | |
Loss on extinguishment of debt, discontinued operations | (764) | 0 | (764) | 0 | |
Net income | 332,770 | 5,893 | 329,352 | 19,942 | |
Less: Net income attributable to noncontrolling interests in subsidiaries | 0 | 0 | 0 | 0 | |
Net income attributable to the controlling interests | 332,770 | 5,893 | 329,352 | 19,942 | |
Capital expenditures | 12,150 | 15,504 | 30,905 | 34,063 | |
Total assets | 2,675,076 | 2,416,517 | 2,675,076 | 2,416,517 | $ 2,417,104 |
Office | Reportable Segments | |||||
Segment Reporting Information [Line Items] | |||||
Real estate rental revenue | 39,810 | 42,438 | 124,164 | 135,258 | |
Real estate expenses | 15,148 | 15,368 | 45,937 | 48,031 | |
Net operating income | 24,662 | 27,070 | 78,227 | 87,227 | |
Capital expenditures | 6,039 | 8,537 | 16,347 | 17,926 | |
Total assets | 1,191,838 | 1,246,026 | 1,191,838 | 1,246,026 | |
Multifamily | Reportable Segments | |||||
Segment Reporting Information [Line Items] | |||||
Real estate rental revenue | 35,790 | 23,953 | 90,012 | 71,168 | |
Real estate expenses | 14,232 | 9,297 | 34,928 | 28,012 | |
Net operating income | 21,558 | 14,656 | 55,084 | 43,156 | |
Capital expenditures | 5,742 | 5,708 | 12,841 | 13,068 | |
Total assets | 1,333,146 | 785,397 | 1,333,146 | 785,397 | |
Corporate and Other | |||||
Segment Reporting Information [Line Items] | |||||
Real estate rental revenue | 4,659 | 4,610 | 14,337 | 13,564 | |
Real estate expenses | 1,312 | 1,323 | 4,104 | 3,895 | |
Net operating income | 3,347 | 3,287 | 10,233 | 9,669 | |
Capital expenditures | 369 | 1,259 | 1,717 | 3,069 | |
Total assets | $ 150,092 | $ 385,094 | $ 150,092 | $ 385,094 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) $ / shares in Units, shares in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($)$ / sharesshares | May 04, 2018USD ($)agreement | |
Class of Stock [Line Items] | |||||
Number of separate equity distribution agreements | agreement | 8 | ||||
Net proceeds from equity issuances | $ 3,700,000 | $ 35,500,000 | $ 3,681,000 | $ 35,472,000 | |
Common Stock | |||||
Class of Stock [Line Items] | |||||
Shares reserved for future issuances | $ 250,000,000 | ||||
Common shares issued (in shares) | shares | 0.1 | 1.2 | 0.1 | 1.2 | |
Shares issued, weighted average price per share (in dollars per share) | $ / shares | $ 27.52 | $ 31.18 | $ 27.52 | $ 31.18 |
Shareholders' Equity - Dividend
Shareholders' Equity - Dividend Reinvestment Program Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Equity [Abstract] | ||||
Issuance of common shares, dividend reinvestment program | 64 | 18 | 128 | 74 |
Weighted average price per share, dividend reinvestment program (in dollars per share) | $ 27.67 | $ 30.68 | $ 26.97 | $ 29.29 |
Proceeds from dividend reinvestment program | $ 1,757 | $ 565 | $ 3,430 | $ 1,811 |
Uncategorized Items - wre-93020
Label | Element | Value |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (906,000) |
Accumulated Distributions in Excess of Net Income [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (906,000) |