Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 26, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-6622 | |
Entity Registrant Name | WASHINGTON REAL ESTATE INVESTMENT TRUST | |
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 | 87,425,784 | |
Entity Central Index Key | 0000104894 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Land | $ 340,046 | $ 322,623 |
Income producing property | 1,733,326 | 1,642,147 |
Net income producing property, at cost | 2,073,372 | 1,964,770 |
Accumulated depreciation and amortization | (421,663) | (402,560) |
Net income producing property | 1,651,709 | 1,562,210 |
Properties under development or held for future development | 31,157 | 30,631 |
Total real estate held for investment, net | 1,682,866 | 1,592,841 |
Cash and cash equivalents | 139,711 | 233,600 |
Restricted cash | 636 | 620 |
Rents and other receivables | 16,120 | 15,067 |
Prepaid expenses and other assets | 37,391 | 33,866 |
Total assets | 1,876,724 | 1,875,994 |
Liabilities | ||
Notes payable, net | 497,093 | 496,946 |
Accounts payable and other liabilities | 33,184 | 40,585 |
Dividend payable | 14,924 | 14,650 |
Advance rents | 1,463 | 2,082 |
Tenant security deposits | 4,817 | 4,669 |
Total liabilities | 551,481 | 558,932 |
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; 150,000 and 100,000 shares authorized; 87,414 and 86,261 shares issued and outstanding, as of March 31, 2022 and December 31, 2021, respectively | 874 | 863 |
Additional paid in capital | 1,725,828 | 1,697,477 |
Distributions in excess of net income | (385,108) | (362,494) |
Accumulated other comprehensive loss | (16,656) | (19,091) |
Total shareholders’ equity | 1,324,938 | 1,316,755 |
Noncontrolling interests in subsidiaries | 305 | 307 |
Total equity | 1,325,243 | 1,317,062 |
Total liabilities and equity | $ 1,876,724 | $ 1,875,994 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred shares, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred shares, issued (in shares) | 0 | 0 |
Preferred shares, outstanding (in shares) | 0 | 0 |
Shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Shares of beneficial interest, authorized (in shares) | 150,000,000 | 100,000,000 |
Shares of beneficial interest, issued (in shares) | 87,414,000 | 86,261,000 |
Shares of beneficial interest, outstanding (in shares) | 87,414,000 | 86,261,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue | ||
Revenue, type [Extensible Enumeration] | Real Estate [Member] | Real Estate [Member] |
Real estate rental revenue | $ 47,804 | $ 40,607 |
Expenses | ||
Property operating and maintenance | 10,565 | 9,395 |
Real estate taxes and insurance | 6,587 | 5,596 |
Property management | 1,750 | 1,463 |
General and administrative | 6,939 | 5,604 |
Transformation costs | 2,223 | 0 |
Depreciation and amortization | 22,200 | 16,987 |
Expenses | 50,264 | 39,045 |
Real estate operating (loss) income | (2,460) | 1,562 |
Other income (expense) | ||
Interest expense | (5,650) | (10,123) |
Other income | 386 | 1,284 |
Total other income (expense) | (5,264) | (8,839) |
Loss from continuing operations | (7,724) | (7,277) |
Discontinued operations: | ||
Income from operations of properties sold or held for sale | 0 | 6,130 |
Income from discontinued operations | 0 | 6,130 |
Net loss | $ (7,724) | $ (1,147) |
Basic net (loss) income per common share: | ||
Continuing operations, basic (in dollars per share) | $ (0.09) | $ (0.09) |
Discontinued operations, basic (in dollars per share) | 0 | 0.07 |
Basic net income (loss) per common share (in dollars per share) | (0.09) | (0.02) |
Diluted net (loss) income per common share: | ||
Continuing operations, diluted (in dollars per share) | (0.09) | (0.09) |
Discontinued operations, diluted (in dollars per share) | 0 | 0.07 |
Diluted net income (loss) per common share (in dollars per share) | $ (0.09) | $ (0.02) |
Weighted average shares outstanding - basic (in shares) | 87,214 | 84,413 |
Weighted average shares outstanding - diluted (in shares) | 87,214 | 84,413 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (7,724) | $ (1,147) |
Other comprehensive income: | ||
Unrealized gain on interest rate hedges | 1,925 | 1,580 |
Reclassification of unrealized loss on interest rate derivatives to earnings | 510 | 510 |
Comprehensive (loss) income | $ (5,289) | $ 943 |
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 Loss | Total Shareholders’ Equity | Noncontrolling Interests in Subsidiaries |
Beginning Balance (in shares) at Dec. 31, 2020 | 84,409 | ||||||
Beginning Balance at Dec. 31, 2020 | $ 1,321,109 | $ 844 | $ 1,649,366 | $ (298,860) | $ (30,563) | $ 1,320,787 | $ 322 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (1,147) | (1,147) | (1,147) | ||||
Unrealized gain on interest rate hedges | 1,580 | 1,580 | 1,580 | ||||
Amortization of swap settlements | 510 | 510 | 510 | ||||
Distributions to noncontrolling interests | (4) | (4) | |||||
Dividends | $ (25,462) | (25,462) | (25,462) | ||||
Equity issuances, net of issuance costs (in shares) | 24 | 24 | |||||
Equity issuances, net of issuance costs | $ 467 | 467 | 467 | ||||
Shares issued under Dividend Reinvestment Program (in shares) | 23 | 23 | |||||
Shares issued under Dividend Reinvestment Program | $ 520 | 520 | 520 | ||||
Share grants, net of forfeitures and tax withholdings (in shares) | 108 | ||||||
Share grants, net of forfeitures and tax withholdings | 1,329 | $ 2 | 1,327 | 1,329 | |||
Ending Balance (in shares) at Mar. 31, 2021 | 84,564 | ||||||
Ending Balance at Mar. 31, 2021 | 1,298,902 | $ 846 | 1,651,680 | (325,469) | (28,473) | 1,298,584 | 318 |
Beginning Balance (in shares) at Dec. 31, 2021 | 86,261 | ||||||
Beginning Balance at Dec. 31, 2021 | 1,317,062 | $ 863 | 1,697,477 | (362,494) | (19,091) | 1,316,755 | 307 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (7,724) | (7,724) | (7,724) | ||||
Unrealized gain on interest rate hedges | 1,925 | 1,925 | 1,925 | ||||
Amortization of swap settlements | 510 | 510 | 510 | ||||
Distributions to noncontrolling interests | (2) | (2) | |||||
Dividends | $ (14,890) | (14,890) | (14,890) | ||||
Equity issuances, net of issuance costs (in shares) | 1,032 | 1,032 | |||||
Equity issuances, net of issuance costs | $ 26,851 | $ 10 | 26,841 | 26,851 | |||
Shares issued under Dividend Reinvestment Program (in shares) | 10 | 10 | |||||
Shares issued under Dividend Reinvestment Program | $ 264 | 264 | 264 | ||||
Share grants, net of forfeitures and tax withholdings (in shares) | 111 | ||||||
Share grants, net of forfeitures and tax withholdings | 1,247 | $ 1 | 1,246 | 1,247 | |||
Ending Balance (in shares) at Mar. 31, 2022 | 87,414 | ||||||
Ending Balance at Mar. 31, 2022 | $ 1,325,243 | $ 874 | $ 1,725,828 | $ (385,108) | $ (16,656) | $ 1,324,938 | $ 305 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per share (in dollars per share) | $ 0.17 | $ 0.30 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (7,724) | $ (1,147) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 22,200 | 29,643 |
Credit losses on lease related receivables | 410 | 1,043 |
Share-based compensation expense | 2,082 | 1,664 |
Net amortization of debt premiums, discounts and related financing costs | 1,001 | 1,112 |
Changes in operating other assets | (735) | (1,619) |
Changes in operating other liabilities | (8,583) | 6,543 |
Net cash provided by operating activities | 8,651 | 37,239 |
Cash flows from investing activities | ||
Real estate acquisitions, net | (104,572) | 0 |
Capital improvements to real estate | (4,004) | (4,032) |
Development in progress | (595) | (4,161) |
Real estate deposits, net | (5,330) | 0 |
Non-real estate capital improvements | (32) | (7) |
Net cash used in investing activities | (114,533) | (8,200) |
Cash flows from financing activities | ||
Line of credit repayments, net | 0 | (9,000) |
Dividends paid | (14,615) | (25,398) |
Payment of financing costs | (39) | 0 |
Distributions to noncontrolling interests | (2) | (4) |
Proceeds from dividend reinvestment program | 264 | 520 |
Net proceeds from equity issuances | 26,852 | 467 |
Payment of tax withholdings for restricted share awards | (451) | (334) |
Net cash provided by (used in) financing activities | 12,009 | (33,749) |
Net decrease in cash, cash equivalents and restricted cash | (93,873) | (4,710) |
Cash, cash equivalents and restricted cash at beginning of period | 234,220 | 8,303 |
Cash, cash equivalents and restricted cash at end of period | 140,347 | 3,593 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest, net of amounts capitalized | 8,557 | 4,345 |
Change in accrued capital improvements and development costs | 1,145 | (3,844) |
Dividend payable | 14,924 | 25,424 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 139,711 | 3,017 |
Restricted cash | 636 | 576 |
Cash, cash equivalents and restricted cash | $ 140,347 | $ 3,593 |
Nature of Business
Nature of Business | 3 Months Ended |
Mar. 31, 2022 | |
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 primarily consists of the ownership of apartment communities in the greater Washington, DC metro and Southeastern regions. Within these notes to the financial statements, we refer to the three months ended March 31, 2022 and March 31, 2021 as the “2022 Quarter” and the “2021 Quarter,” respectively. 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 (determined before the deduction for dividends paid and excluding net capital gains 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Basis of Presentations | 3 Months Ended |
Mar. 31, 2022 | |
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, 2021. 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 Generally Accepted Accounting Principles (“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, 2021. Held for Sale and 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 has 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. 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. Lessee Accounting For leases where we are the lessee, primarily our corporate office operating lease, we recognize a right-of-use asset and a lease liability in accordance with Accounting Standards Codification (“ASC”) Topic 842. The right-of-use asset and associated liability is equal to the present value of the minimum lease payments, applying our incremental borrowing rate. Our borrowing rate is computed based on observable borrowing rates taking into consideration our credit quality and adjusting to a secured borrowing rate for similar assets and term. As of March 31, 2022, our balance sheet included $3.7 million in right-of-use assets and liabilities, net of amortization. Lease expense for the operating lease is recognized on a straight-line basis over the expected lease term and is included in “General and administrative expense.” Restricted Cash Restricted cash includes funds held in escrow for tenant security deposits. Transformation Costs Transformation costs include costs related to the strategic shift away from the commercial sector to the residential sector, including the allocation of internal costs, consulting, advisory and termination benefits. 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 | 3 Months Ended |
Mar. 31, 2022 | |
Real Estate [Abstract] | |
Real Estate | REAL ESTATE Acquisitions We acquired the following property during the 2022 Quarter (the “2022 acquisition”): Acquisition Date Property Type # of homes Average Occupancy Contract February 1, 2022 Carlyle of Sandy Springs Residential 389 94.4% $ 105,586 The results of operations from the acquired operating property are included in the condensed consolidated statements of operations as of its acquisition date and were as follows (in thousands): Three Months Ended March 31, 2022 Real estate rental revenue $ 1,075 Net loss (664) We accounted for the 2022 acquisition as an asset acquisition. 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 acquisition on a relative fair value basis . The total cost of the 2022 acquisition was as follows (in thousands): Contract purchase price $ 105,586 Capitalized acquisition costs 134 Total $ 105,720 We have recorded the total cost of the 2022 acquisition as follows (in thousands): Land $ 17,423 Building 85,783 Absorption costs 2,514 Total $ 105,720 The weighted remaining average life for the absorption costs is four months. Development/Redevelopment We have properties under development/redevelopment and held for current or future development. As of March 31, 2022, we have invested $30.3 million, including the cost of acquired land, in a residential development adjacent to Riverside Apartments. In addition, in our residential segment, we continue to capitalize qualifying costs on several other projects with minor development activity necessary to ready each project for its intended use. Properties Sold and Held for Sale We intend to hold our properties for investment with a view to long-term appreciation, to engage in the business of acquiring, developing and owning our properties and to make occasional sales of properties that no longer meet our long-term strategy or return objectives and where market conditions for sale are favorable. The proceeds from the sales may be reinvested into other properties, used to fund development operations or to support other corporate needs or distributed to our shareholders. Depreciation on these properties is discontinued at the time they are classified as held for sale, but operating revenues, operating expenses and interest expense continue to be recognized until the date of sale. We sold the following properties during 2021 ($ in thousands): Disposition Date Property Name Property Type Rentable Square Feet Contract Sales Price (Loss) Gain on Sale July 26, 2021 Office Portfolio (1) Office 2,370,000 $ 766,000 $ (11,220) September 22, 2021 Retail Portfolio (2) Retail 693,000 168,314 57,661 Total 2021 3,063,000 $ 934,314 $ 46,441 ______________________________ (1) Consists of twelve office properties: 1901 Pennsylvania Avenue, 515 King Street, 1220 19th Street, 1600 Wilson Boulevard, Silverline Center, Courthouse Square, 2000 M Street, 1140 Connecticut Avenue, Army Navy Club, 1775 Eye Street, Fairgate at Ballston and Arlington Tower. (2) Consists of eight retail properties: Takoma Park, Westminster, Concord Centre, Chevy Chase Metro Plaza, 800 S. Washington Street, Randolph Shopping Center, Montrose Shopping Center and Spring Valley Village . We have fully transferred control of the assets sold in 2021 and do not have continuing involvement in their operations. The dispositions of the Office Portfolio and the Retail Portfolio represent a strategic shift that had a major effect on our financial results and we have accordingly reported the Office Portfolio and Retail Portfolio as discontinued operations. As of March 31, 2022, we assessed our properties for impairment and did not recognize any impairment charges during the 2022 Quarter. We applied reasonable estimates and judgments in evaluating each of the properties as of March 31, 2022. Should external or internal circumstances change requiring the need to shorten holding periods or adjust future estimated cash flows from our properties, we could be required to record impairment charges in the future. Discontinued Operations The results of the Office Portfolio and Retail Portfolio are classified as discontinued operations and are summarized as follows (amounts in thousands, except for share data): Three Months Ended March 31, 2021 Real estate rental revenue $ 29,026 Expenses Property operating and maintenance (4,476) Real estate taxes and insurance (4,877) Property management (887) Depreciation and amortization (12,656) Income from discontinued operations $ 6,130 Basic net income per share $ 0.07 Diluted net income per share $ 0.07 Capital expenditures $ 374 All assets and liabilities related to the Office Portfolio and Retail Portfolio were sold as of December 31, 2021. |
Unsecured Line of Credit Payabl
Unsecured Line of Credit Payable | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Unsecured Line of Credit Payable | UNSECURED LINE OF CREDIT PAYABLE During the third quarter of 2021, 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”) and the continuation of an existing $250.0 million unsecured term loan (“2018 Term Loan”). The Revolving Credit Facility has a four-year term ending in August 2025, 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 0.70% to 1.40% or the base rate plus a margin ranging from 0.0% to 0.40% (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 March 31, 2022, the interest rate on the Revolving Credit Facility is one month LIBOR plus 0.85%, the one month LIBOR is 0.45% and the facility fee is 0.20%. All outstanding advances for the Revolving Credit Facility are due and payable upon maturity in August 2025, 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 increased and replaced 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. On September 27, 2021, we prepaid a $150.0 million portion of the 2018 Term Loan using proceeds from the sale of the Office Portfolio and Retail Portfolio (see note 3). We currently expect to hold the remaining $100.0 million portion of the 2018 Term Loan until maturity. The amount of the Revolving Credit Facility’s unsecured line of credit unused and available at March 31, 2022 was as follows (in thousands): Committed capacity $ 700,000 Borrowings outstanding — Unused and available $ 700,000 There were no borrowings or repayments on the Revolving Credit Facility during the 2022 Quarter. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS We have one interest rate swap arrangement with a notional amount of $100.0 million that effectively fixes the remaining $100.0 million portion of the 2018 Term Loan. The interest rate swap arrangement is recorded at fair value in accordance with GAAP, based on discounted cash flow methodologies and observable inputs. We record the effective portion of changes in fair value of the cash flow hedge in Other comprehensive income (loss). We assess the effectiveness of a cash flow hedge both at inception and on an ongoing basis. If a cash flow hedge is no longer expected to be effective, hedge accounting is discontinued. Hedge ineffectiveness of our cash flow hedges is recorded in earnings. The fair values of the interest rate swap as of March 31, 2022 and December 31, 2021, were as follows (in thousands): Fair Value Derivative Assets (Liabilities) Derivative Instrument Aggregate Notional Amount Effective Date Maturity Date March 31, 2022 December 31, 2021 Interest rate swap $ 100,000 March 31, 2017 July 21, 2023 $ 1,104 $ (821) 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 net unrealized gains or losses on the effective swaps were recognized in Other comprehensive income (loss), as follows (in thousands): Three Months Ended March 31, 2022 2021 Unrealized gain on interest rate hedges $ 1,925 $ 1,580 Amounts reported in Accumulated other comprehensive loss related to effective cash flow hedges will be reclassified to interest expense as interest payments are made on our variable-rate debt. The gains or losses reclassified from Accumulated other comprehensive loss into interest expense for the three months ended March 31, 2022 and 2021, were as follows (in thousands): Three Months Ended March 31, 2022 2021 Loss reclassified from accumulated other comprehensive loss into interest expense $ 510 $ 510 During the next twelve months, we estimate that an additional $0.6 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 March 31, 2022, the fair value of derivative assets, including accrued interest, was $1.1 million and we did not have any derivatives in a liability position. As of March 31, 2022, 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 | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 and December 31, 2021 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 derivatives (see note 5). 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 derivatives is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each interest rate derivative. This analysis reflects the contractual terms of the interest rate derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate derivatives 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 derivatives fall into Level 2 in the fair value hierarchy. The fair values of these assets and liabilities at March 31, 2022 and December 31, 2021 were as follows (in thousands): March 31, 2022 December 31, 2021 Fair Level 1 Level 2 Level 3 Fair Level 1 Level 2 Level 3 Assets: SERP $ 2,231 $ — $ 2,231 $ — $ 2,566 $ — $ 2,566 $ — Interest rate derivatives 1,104 — 1,104 — — — — — Liabilities: Interest rate derivatives $ — $ — $ — $ — $ (821) $ — $ (821) $ — 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 March 31, 2022 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 March 31, 2022 and December 31, 2021, the carrying values and estimated fair values of our financial instruments were as follows (in thousands): March 31, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value Cash and cash equivalents $ 139,711 $ 139,711 $ 233,600 $ 233,600 Restricted cash 636 636 620 620 Notes payable, net 497,093 494,553 496,946 515,341 |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
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. Total Compensation Expense Total compensation expense recognized in the consolidated financial statements for all outstanding share based awards was $2.1 million and $1.7 million for the 2022 Quarter and 2021 Quarter, respectively. Restricted Share Awards The total fair values of restricted share awards vested was $1.2 million and $1.0 million for the 2022 Quarter and 2021 Quarter, respectively. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2022 | |
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 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 months ended March 31, 2022 and 2021 were as follows (in thousands, except per share data): Three Months Ended March 31, 2022 2021 Numerator: Loss from continuing operations $ (7,724) $ (7,277) Allocation of earnings to unvested restricted share awards (72) (139) Adjusted net loss from continuing operations (7,796) (7,416) Income from discontinued operations — 6,130 Adjusted net loss $ (7,796) $ (1,286) Denominator: Weighted average shares outstanding – basic and diluted 87,214 84,413 Earnings per common share, basic: Continuing operations $ (0.09) $ (0.09) Discontinued operations — 0.07 Basic net loss per common share (1) $ (0.09) $ (0.02) Earnings per common share, diluted: Continuing operations $ (0.09) $ (0.09) Discontinued operations — 0.07 Diluted net loss per common share (1) $ (0.09) $ (0.02) Dividends declared per common share $ 0.17 $ 0.30 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION We operate in a single reportable segment which includes the ownership, development, redevelopment and acquisition of apartment communities. Each of our operating properties, including our remaining office property, do not meet the criteria to be considered separate operating segments on a stand-alone basis. We do not distinguish or group our consolidated operations based on size, type or geography. All but three communities are within the Washington, DC metro region and one community, Riverside Apartments, comprises more than 10% of consolidated revenues. Further, our apartment communities have similar long-term economic characteristics and provide similar products and services to our residents. As a result, our operating properties are aggregated into a single reportable segment: residential. Prior to the end of the second quarter of 2021, we had two reportable segments: office and residential. During the third quarter of 2021, we closed on the sales of the Office Portfolio and the Retail Portfolio (see note 3), and following such sales, we have one remaining office property, Watergate 600, which does not meet the criteria for a reportable segment, and has been classified within “Other” on our segment disclosure tables. We evaluate performance based upon net operating income (“NOI”) of the combined properties in the segment. Our reportable operating segment consolidates 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. NOI is a key measurement of our segment profit and loss and is defined as real estate rental revenue less real estate expenses. The following tables present revenues, NOI, capital expenditures and total assets for the three months ended March 31, 2022 and 2021 from our Residential segment as well as Other, and reconcile NOI to net income (loss) as reported (in thousands): Three Months Ended March 31, 2022 Residential Other (1) Consolidated Real estate rental revenue 43,334 4,470 $ 47,804 Real estate expenses 15,901 1,251 17,152 Net operating income $ 27,433 $ 3,219 $ 30,652 Other income (expense): Property management expenses (1,750) General and administrative expenses (6,939) Transformation costs (2,223) Depreciation and amortization (22,200) Interest expense (5,650) Other income 386 Net loss $ (7,724) Capital expenditures $ 3,430 $ 596 $ 4,026 Total assets $ 1,545,731 $ 330,993 $ 1,876,724 Three Months Ended March 31, 2021 Residential Other (1), (2) Consolidated Real estate rental revenue 36,167 4,440 $ 40,607 Real estate expenses 13,826 1,165 14,991 Net operating income $ 22,341 $ 3,275 $ 25,616 Other income (expense): Property management expenses (1,463) General and administrative expenses (5,604) Depreciation and amortization (16,987) Interest expense (10,123) Other income 1,284 Discontinued operations: Income from operations of properties sold or held for sale 6,130 Net loss $ (1,147) Capital expenditures $ 3,737 $ 302 $ 4,039 Total assets $ 1,322,831 $ 1,057,205 $ 2,380,036 ______________________________ (1) Other represents Watergate 600, an office property that does not meet the qualitative or quantitative criteria for a reportable segment. (2) Total assets and capital expenditures include office and retail properties classified as discontinued operations. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | SHAREHOLDERS' EQUITY On February 17, 2021, we entered into separate amendments to each of our existing equity distribution agreements (“Original 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 Truist Securities, Inc. (f/k/a SunTrust Robinson Humphrey, Inc.), each dated May 4, 2018 (collectively, as amended, the “Equity Distribution Agreements”) for our at-the-market program. Also on February 17, 2021, we entered into a separate equity distribution agreement with BTIG, LLC on the same terms as the Amended Equity Distribution Agreements (the “BTIG Equity Distribution Agreement”). On September 22, 2021, BTIG, LLC notified us that it was terminating the BTIG Equity Distribution Agreement, effective as of September 27, 2021. Pursuant to the Equity Distribution Agreements, we may sell, from time to time, up to an aggregate price of $550.0 million of our common shares of beneficial interest, $0.01 par value per share. Issuances of our common shares are made at market prices prevailing at the time of issuance. We may use net proceeds from the issuance of common shares under this program for general business purposes, including, without limitation, working capital, the acquisition, renovation, expansion, improvement, development or redevelopment of income producing properties or the repayment of debt. Our issuances and net proceeds on the Equity Distribution Agreements for the 2022 Quarter and 2021 Quarter were as follows ($ in thousands, except per share data): Three Months Ended March 31, 2022 2021 Issuance of common shares 1,032 24 Weighted average price per share $ 26.27 $ 22.06 Net proceeds $ 26,851 $ 467 We have a dividend reinvestment program whereby shareholders may use their dividends and optional cash payments to purchase common shares. The 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 are used for general corporate purposes. Our issuances and net proceeds on the dividend reinvestment program for the three months ended March 31, 2022 and 2021 were as follows ($ in thousands, except per share data): Three Months Ended March 31, 2022 2021 Issuance of common shares 10 23 Weighted average price per share $ 26.04 $ 22.07 Net proceeds $ 264 $ 520 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Basis of Presentations (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | 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 Presentation | 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 Generally Accepted Accounting Principles (“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, 2021. |
Held for Sale and Discontinued Operations | Held for Sale and 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 has 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. 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. |
Lessee Accounting | Lessee Accounting For leases where we are the lessee, primarily our corporate office operating lease, we recognize a right-of-use asset and a lease liability in accordance with Accounting Standards Codification (“ASC”) Topic 842. The right-of-use asset and associated liability is equal to the present value of the minimum lease payments, applying our incremental borrowing rate. Our borrowing rate is computed based on observable borrowing rates taking into consideration our credit quality and adjusting to a secured borrowing rate for similar assets and term. As of March 31, 2022, our balance sheet included $3.7 million in right-of-use assets and liabilities, net of amortization. |
Restricted Cash | Restricted Cash Restricted cash includes funds held in escrow for tenant security deposits. |
Transformation Costs | Transformation Costs Transformation costs include costs related to the strategic shift away from the commercial sector to the residential sector, including the allocation of internal costs, consulting, advisory and termination benefits. |
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) | 3 Months Ended |
Mar. 31, 2022 | |
Real Estate [Abstract] | |
Schedule Of Real Estate Property Acquired | We acquired the following property during the 2022 Quarter (the “2022 acquisition”): Acquisition Date Property Type # of homes Average Occupancy Contract February 1, 2022 Carlyle of Sandy Springs Residential 389 94.4% $ 105,586 |
Schedule of Operations from Acquired Properties | The results of operations from the acquired operating property are included in the condensed consolidated statements of operations as of its acquisition date and were as follows (in thousands): Three Months Ended March 31, 2022 Real estate rental revenue $ 1,075 Net loss (664) |
Schedule Of Cost Of Acquisition | The total cost of the 2022 acquisition was as follows (in thousands): Contract purchase price $ 105,586 Capitalized acquisition costs 134 Total $ 105,720 |
Schedule of Acquisition Asset Valuation | We have recorded the total cost of the 2022 acquisition as follows (in thousands): Land $ 17,423 Building 85,783 Absorption costs 2,514 Total $ 105,720 |
Schedule of Properties Sold | We sold the following properties during 2021 ($ in thousands): Disposition Date Property Name Property Type Rentable Square Feet Contract Sales Price (Loss) Gain on Sale July 26, 2021 Office Portfolio (1) Office 2,370,000 $ 766,000 $ (11,220) September 22, 2021 Retail Portfolio (2) Retail 693,000 168,314 57,661 Total 2021 3,063,000 $ 934,314 $ 46,441 ______________________________ (1) Consists of twelve office properties: 1901 Pennsylvania Avenue, 515 King Street, 1220 19th Street, 1600 Wilson Boulevard, Silverline Center, Courthouse Square, 2000 M Street, 1140 Connecticut Avenue, Army Navy Club, 1775 Eye Street, Fairgate at Ballston and Arlington Tower. (2) Consists of eight retail properties: Takoma Park, Westminster, Concord Centre, Chevy Chase Metro Plaza, 800 S. Washington Street, Randolph Shopping Center, Montrose Shopping Center and Spring Valley Village . The results of the Office Portfolio and Retail Portfolio are classified as discontinued operations and are summarized as follows (amounts in thousands, except for share data): Three Months Ended March 31, 2021 Real estate rental revenue $ 29,026 Expenses Property operating and maintenance (4,476) Real estate taxes and insurance (4,877) Property management (887) Depreciation and amortization (12,656) Income from discontinued operations $ 6,130 Basic net income per share $ 0.07 Diluted net income per share $ 0.07 Capital expenditures $ 374 |
Unsecured Line of Credit Paya_2
Unsecured Line of Credit Payable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Revolving Credit Facility | The amount of the Revolving Credit Facility’s unsecured line of credit unused and available at March 31, 2022 was as follows (in thousands): Committed capacity $ 700,000 Borrowings outstanding — Unused and available $ 700,000 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Values of Interest Rate Swaps | The fair values of the interest rate swap as of March 31, 2022 and December 31, 2021, were as follows (in thousands): Fair Value Derivative Assets (Liabilities) Derivative Instrument Aggregate Notional Amount Effective Date Maturity Date March 31, 2022 December 31, 2021 Interest rate swap $ 100,000 March 31, 2017 July 21, 2023 $ 1,104 $ (821) |
Schedule of Unrealized Gain (Loss) and Reclassification of Interest Rate Swap | The net unrealized gains or losses on the effective swaps were recognized in Other comprehensive income (loss), as follows (in thousands): Three Months Ended March 31, 2022 2021 Unrealized gain on interest rate hedges $ 1,925 $ 1,580 Amounts reported in Accumulated other comprehensive loss related to effective cash flow hedges will be reclassified to interest expense as interest payments are made on our variable-rate debt. The gains or losses reclassified from Accumulated other comprehensive loss into interest expense for the three months ended March 31, 2022 and 2021, were as follows (in thousands): Three Months Ended March 31, 2022 2021 Loss reclassified from accumulated other comprehensive loss into interest expense $ 510 $ 510 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Assets and Liabilities | The fair values of these assets and liabilities at March 31, 2022 and December 31, 2021 were as follows (in thousands): March 31, 2022 December 31, 2021 Fair Level 1 Level 2 Level 3 Fair Level 1 Level 2 Level 3 Assets: SERP $ 2,231 $ — $ 2,231 $ — $ 2,566 $ — $ 2,566 $ — Interest rate derivatives 1,104 — 1,104 — — — — — Liabilities: Interest rate derivatives $ — $ — $ — $ — $ (821) $ — $ (821) $ — |
Schedule of Carrying Values and Estimated Fair Values of Financial Instruments | As of March 31, 2022 and December 31, 2021, the carrying values and estimated fair values of our financial instruments were as follows (in thousands): March 31, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value Cash and cash equivalents $ 139,711 $ 139,711 $ 233,600 $ 233,600 Restricted cash 636 636 620 620 Notes payable, net 497,093 494,553 496,946 515,341 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 months ended March 31, 2022 and 2021 were as follows (in thousands, except per share data): Three Months Ended March 31, 2022 2021 Numerator: Loss from continuing operations $ (7,724) $ (7,277) Allocation of earnings to unvested restricted share awards (72) (139) Adjusted net loss from continuing operations (7,796) (7,416) Income from discontinued operations — 6,130 Adjusted net loss $ (7,796) $ (1,286) Denominator: Weighted average shares outstanding – basic and diluted 87,214 84,413 Earnings per common share, basic: Continuing operations $ (0.09) $ (0.09) Discontinued operations — 0.07 Basic net loss per common share (1) $ (0.09) $ (0.02) Earnings per common share, diluted: Continuing operations $ (0.09) $ (0.09) Discontinued operations — 0.07 Diluted net loss per common share (1) $ (0.09) $ (0.02) Dividends declared per common share $ 0.17 $ 0.30 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Reconciliation of Net Operating Income of Reportable Segments | The following tables present revenues, NOI, capital expenditures and total assets for the three months ended March 31, 2022 and 2021 from our Residential segment as well as Other, and reconcile NOI to net income (loss) as reported (in thousands): Three Months Ended March 31, 2022 Residential Other (1) Consolidated Real estate rental revenue 43,334 4,470 $ 47,804 Real estate expenses 15,901 1,251 17,152 Net operating income $ 27,433 $ 3,219 $ 30,652 Other income (expense): Property management expenses (1,750) General and administrative expenses (6,939) Transformation costs (2,223) Depreciation and amortization (22,200) Interest expense (5,650) Other income 386 Net loss $ (7,724) Capital expenditures $ 3,430 $ 596 $ 4,026 Total assets $ 1,545,731 $ 330,993 $ 1,876,724 Three Months Ended March 31, 2021 Residential Other (1), (2) Consolidated Real estate rental revenue 36,167 4,440 $ 40,607 Real estate expenses 13,826 1,165 14,991 Net operating income $ 22,341 $ 3,275 $ 25,616 Other income (expense): Property management expenses (1,463) General and administrative expenses (5,604) Depreciation and amortization (16,987) Interest expense (10,123) Other income 1,284 Discontinued operations: Income from operations of properties sold or held for sale 6,130 Net loss $ (1,147) Capital expenditures $ 3,737 $ 302 $ 4,039 Total assets $ 1,322,831 $ 1,057,205 $ 2,380,036 ______________________________ (1) Other represents Watergate 600, an office property that does not meet the qualitative or quantitative criteria for a reportable segment. (2) Total assets and capital expenditures include office and retail properties classified as discontinued operations. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Equity Distribution Agreement Activity | Our issuances and net proceeds on the Equity Distribution Agreements for the 2022 Quarter and 2021 Quarter were as follows ($ in thousands, except per share data): Three Months Ended March 31, 2022 2021 Issuance of common shares 1,032 24 Weighted average price per share $ 26.27 $ 22.06 Net proceeds $ 26,851 $ 467 |
Schedule of Dividend Reinvestment Program Activity | Our issuances and net proceeds on the dividend reinvestment program for the three months ended March 31, 2022 and 2021 were as follows ($ in thousands, except per share data): Three Months Ended March 31, 2022 2021 Issuance of common shares 10 23 Weighted average price per share $ 26.04 $ 22.07 Net proceeds $ 264 $ 520 |
Nature of Business (Details)
Nature of Business (Details) - TRSs - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Properties Sold and Held for Sale [Line Items] | ||
Deferred tax asset | $ 1.4 | $ 1.4 |
Deferred tax valuation allowance | $ 1.4 | $ 1.4 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Basis of Presentations (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2022USD ($)segment | Mar. 31, 2021segment | |
Accounting Policies [Abstract] | ||
Right-of-use assets | $ 3.7 | |
Lease liability | $ 3.7 | |
Number of reportable segments | segment | 1 | 2 |
Real Estate - Acquisitions (Det
Real Estate - Acquisitions (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($)unit | |
Real Estate [Line Items] | |
Contract Purchase Price (in thousands) | $ 105,586 |
Residential | Carlyle of Sandy Springs | |
Real Estate [Line Items] | |
Average Occupancy | 94.40% |
Contract Purchase Price (in thousands) | $ 105,586 |
Residential | Carlyle of Sandy Springs | 2022 acquisitions | |
Real Estate [Line Items] | |
# of homes | unit | 389 |
Real Estate - Schedule of Opera
Real Estate - Schedule of Operations from Acquired Properties (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Real Estate [Abstract] | |
Real estate rental revenue | $ 1,075 |
Net loss | $ (664) |
Real Estate - Schedule of Cost
Real Estate - Schedule of Cost of Acquisition (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Real Estate [Abstract] | |
Contract Purchase Price (in thousands) | $ 105,586 |
Capitalized acquisition costs | 134 |
Total | $ 105,720 |
Real Estate - Schedule of Acqui
Real Estate - Schedule of Acquisition Asset Valuation (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Real Estate [Line Items] | |
Total | $ 105,720 |
Absorption Costs | |
Real Estate [Line Items] | |
Absorption costs | 2,514 |
Land | |
Real Estate [Line Items] | |
Property, plant and equipment | 17,423 |
Building | |
Real Estate [Line Items] | |
Property, plant and equipment | $ 85,783 |
Real Estate - Narrative (Detail
Real Estate - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Real Estate [Line Items] | ||
Weighted average life for absorption costs | 4 months | |
Properties under development or held for future development | $ 31,157 | $ 30,631 |
Real estate impairment | 0 | |
Riverside Developments | ||
Real Estate [Line Items] | ||
Properties under development or held for future development | $ 30,300 |
Real Estate - Properties Sold a
Real Estate - Properties Sold and Held for Sale (Details) ft² in Thousands, $ in Thousands | Sep. 22, 2021USD ($)ft²property | Jul. 26, 2021USD ($)ft²property | Dec. 31, 2021USD ($)ft² |
Office | |||
Properties Sold and Held for Sale [Line Items] | |||
Number of properties held for sale | property | 12 | ||
Retail | |||
Properties Sold and Held for Sale [Line Items] | |||
Number of properties held for sale | property | 8 | ||
2021 Properties | Disposal group | |||
Properties Sold and Held for Sale [Line Items] | |||
Rentable Square Feet (sq ft) | ft² | 3,063 | ||
Contract Sales Price | $ 934,314 | ||
Gain (loss) on sale of real estate | $ 46,441 | ||
2021 Properties | Disposal group | Office Portfolio | Office | |||
Properties Sold and Held for Sale [Line Items] | |||
Rentable Square Feet (sq ft) | ft² | 2,370 | ||
Contract Sales Price | $ 766,000 | ||
Gain (loss) on sale of real estate | $ (11,220) | ||
2021 Properties | Disposal group | Retail Profile | Retail | |||
Properties Sold and Held for Sale [Line Items] | |||
Rentable Square Feet (sq ft) | ft² | 693 | ||
Contract Sales Price | $ 168,314 | ||
Gain (loss) on sale of real estate | $ 57,661 |
Real Estate - Results of Discon
Real Estate - Results of Discontinued Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Real Estate [Abstract] | ||
Real estate rental revenue | $ 29,026 | |
Property operating and maintenance | (4,476) | |
Real estate taxes and insurance | (4,877) | |
Property management | (887) | |
Depreciation and amortization | (12,656) | |
Income from discontinued operations | $ 0 | $ 6,130 |
Basic net income per share (in dollars per share) | $ 0 | $ 0.07 |
Diluted net income per share (in dollars per share) | $ 0 | $ 0.07 |
Capital expenditures | $ 374 |
Unsecured Line of Credit Paya_3
Unsecured Line of Credit Payable - Narrative (Details) | Sep. 27, 2021USD ($) | Mar. 31, 2022USD ($) | Sep. 30, 2021USD ($)extension_option | Mar. 31, 2021USD ($)extension_option | Mar. 31, 2018USD ($) | Jul. 22, 2016USD ($) |
Line of Credit Facility [Line Items] | ||||||
Repayment of outstanding borrowings | $ 0 | $ 9,000,000 | ||||
Borrowings on the Revolving Credit Facility | 0 | |||||
Line of credit repayments, net | 0 | $ (9,000,000) | ||||
Interest rate swaps | ||||||
Line of Credit Facility [Line Items] | ||||||
Derivative notional amount | $ 100,000,000 | |||||
Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit agreement, aggregate maximum borrowing capacity including accordion feature | $ 1,500,000,000 | |||||
2018 Term Loan B | Interest rate swaps | ||||||
Line of Credit Facility [Line Items] | ||||||
Derivative notional amount | $ 100,000,000 | |||||
Term loan | 2016 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% | |||||
Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility borrowing capacity | $ 700,000,000 | $ 700,000,000 | ||||
Debt instrument term (in years) | 4 years | |||||
Number of extensions allowed | extension_option | 2 | 2 | ||||
Term of allowable extension (in months) | 6 months | 6 months | ||||
Facility fee (percent) | 0.20% | |||||
One-month LIBOR (percent) | 0.45% | |||||
Repayment of outstanding borrowings | 150,000,000 | $ 100,000,000 | ||||
Line of credit repayments, net | $ (150,000,000) | $ (100,000,000) | ||||
Revolving Credit Facility | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Facility fee (percent) | 0.10% | |||||
Revolving Credit Facility | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Facility fee (percent) | 0.30% | |||||
Revolving Credit Facility | LIBOR | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate (percent) | 0.85% | |||||
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) | 0.70% | |||||
Revolving Credit Facility | LIBOR | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate (percent) | 1.40% | |||||
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) | 0.40% | |||||
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 - Revolving Credit Facility Unused and Available Credit (Details) - Revolving Credit Facility - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 |
Line of Credit Facility [Line Items] | ||
Committed capacity | $ 700,000,000 | $ 700,000,000 |
Borrowings outstanding | 0 | |
Unused and available | $ 700,000,000 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - Interest rate swaps - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Jul. 22, 2016 | |
Derivative [Line Items] | ||
Derivative notional amount | $ 100,000,000 | |
Estimated amount to be reclassified within next twelve months as an increase to interest expense | $ 600,000 | |
Fair value of derivative assets | 1,100,000 | |
Fair value of derivative liabilities | $ 0 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Interest Rate Swaps (Details) - Interest rate swaps - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Jul. 22, 2016 |
Derivatives, Fair Value [Line Items] | |||
Aggregate Notional Amount | $ 100,000,000 | ||
2018 Term Loan A | |||
Derivatives, Fair Value [Line Items] | |||
Aggregate Notional Amount | $ 100,000,000 | ||
2018 Term Loan A | Accounts payable and other liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Assets (Liabilities) | $ 1,104,000 | $ (821,000) |
Derivative Instruments - Unreal
Derivative Instruments - Unrealized Gains and Losses and Reclassification (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Unrealized gain on interest rate hedges | $ 1,925 | $ 1,580 |
Loss reclassified from accumulated other comprehensive loss into interest expense | $ 510 | $ 510 |
Fair Value Disclosures - Assets
Fair Value Disclosures - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Interest rate swaps | ||
Assets: | ||
Interest rate derivatives | $ 1,100 | |
Liabilities: | ||
Interest rate derivatives | 0 | |
Recurring | Interest rate swaps | ||
Assets: | ||
Interest rate derivatives | 1,104 | $ 0 |
Recurring | SERP | ||
Assets: | ||
SERP | 2,231 | 2,566 |
Recurring | Interest rate swaps | ||
Liabilities: | ||
Interest rate derivatives | 0 | (821) |
Recurring | Level 1 | Interest rate swaps | ||
Assets: | ||
Interest rate derivatives | 0 | 0 |
Recurring | Level 1 | SERP | ||
Assets: | ||
SERP | 0 | 0 |
Recurring | Level 1 | Interest rate swaps | ||
Liabilities: | ||
Interest rate derivatives | 0 | 0 |
Recurring | Level 2 | Interest rate swaps | ||
Assets: | ||
Interest rate derivatives | 1,104 | 0 |
Recurring | Level 2 | SERP | ||
Assets: | ||
SERP | 2,231 | 2,566 |
Recurring | Level 2 | Interest rate swaps | ||
Liabilities: | ||
Interest rate derivatives | 0 | (821) |
Recurring | Level 3 | Interest rate swaps | ||
Assets: | ||
Interest rate derivatives | 0 | 0 |
Recurring | Level 3 | SERP | ||
Assets: | ||
SERP | 0 | 0 |
Recurring | Level 3 | Interest rate swaps | ||
Liabilities: | ||
Interest rate derivatives | $ 0 | $ 0 |
Fair Value Disclosures - Financ
Fair Value Disclosures - Financial Assets and Liabilities Not Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Carrying Value and Estimated Fair Values [Line Items] | ||
Cash and cash equivalents | $ 139,711 | $ 233,600 |
Restricted cash | 636 | 620 |
Notes payable, net | 497,093 | 496,946 |
Fair Value | ||
Carrying Value and Estimated Fair Values [Line Items] | ||
Cash and cash equivalents | 139,711 | 233,600 |
Restricted cash | 636 | 620 |
Notes payable, net | $ 494,553 | $ 515,341 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 2.1 | $ 1.7 |
Restricted share awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of share awards vested | $ 1.2 | $ 1 |
Total unvested restricted share awards (in shares) | 421,017 | |
Weighted average grant date fair value (in dollars per share) | $ 27.26 | |
Compensation costs not yet recognized | $ 6.9 | |
Recognition period for compensation expense | 23 months | |
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 | |
Incentive plan, period in effect (in years) | 10 years |
Earnings Per Common Share - Com
Earnings Per Common Share - Computations of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Loss from continuing operations | $ (7,724) | $ (7,277) |
Allocation of earnings to unvested restricted share awards | (72) | (139) |
Adjusted net loss from continuing operations | (7,796) | (7,416) |
Income from discontinued operations | 0 | 6,130 |
Adjusted net income (loss), basic | (7,796) | (1,286) |
Adjusted net income (loss), diluted | $ (7,796) | $ (1,286) |
Denominator: | ||
Weighted average shares outstanding - basic (in shares) | 87,214 | 84,413 |
Earnings per common share, basic: | ||
Continuing operations, basic (in dollars per share) | $ (0.09) | $ (0.09) |
Discontinued operations, basic (in dollars per share) | 0 | 0.07 |
Basic net income (loss) per common share (in dollars per share) | (0.09) | (0.02) |
Earnings per common share, diluted: | ||
Continuing operations, diluted (in dollars per share) | (0.09) | (0.09) |
Discontinued operations, diluted (in dollars per share) | 0 | 0.07 |
Diluted net income (loss) per common share (in dollars per share) | (0.09) | (0.02) |
Dividends declared per common share (in dollars per share) | $ 0.17 | $ 0.30 |
Earnings Per Common Share - Nar
Earnings Per Common Share - Narrative (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Dividends declared per share (in dollars per share) | $ 0.17 | $ 0.30 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended | ||
Mar. 31, 2022segment | Mar. 31, 2021segment | Jun. 30, 2021property | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 1 | 2 | |
Office | |||
Segment Reporting Information [Line Items] | |||
Number of properties that do not meet criteria for reportable segment | property | 1 |
Segment Information - Financial
Segment Information - Financial Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Real estate rental revenue | $ 47,804 | $ 40,607 | |
Real estate expenses | 17,152 | 14,991 | |
Net operating income | 30,652 | 25,616 | |
Other income (expense): | |||
Property management expenses | (1,750) | (1,463) | |
General and administrative expenses | (6,939) | (5,604) | |
Transformation costs | (2,223) | 0 | |
Depreciation and amortization | (22,200) | (16,987) | |
Interest expense | (5,650) | (10,123) | |
Other income | 386 | 1,284 | |
Discontinued operations: | |||
Income from operations of properties sold or held for sale | 0 | 6,130 | |
Net loss | (7,724) | (1,147) | |
Capital expenditures | 4,026 | 4,039 | |
Total assets | 1,876,724 | 2,380,036 | $ 1,875,994 |
Residential | |||
Segment Reporting Information [Line Items] | |||
Real estate rental revenue | 43,334 | 36,167 | |
Real estate expenses | 15,901 | 13,826 | |
Net operating income | 27,433 | 22,341 | |
Discontinued operations: | |||
Capital expenditures | 3,430 | 3,737 | |
Total assets | 1,545,731 | 1,322,831 | |
Other | |||
Segment Reporting Information [Line Items] | |||
Real estate rental revenue | 4,470 | 4,440 | |
Real estate expenses | 1,251 | 1,165 | |
Net operating income | 3,219 | 3,275 | |
Discontinued operations: | |||
Capital expenditures | 596 | 302 | |
Total assets | $ 330,993 | $ 1,057,205 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Equity [Abstract] | ||
Common shares of beneficial interest reserved for future issuance | $ 550,000,000 | |
Shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Shareholders' Equity - Equity D
Shareholders' Equity - Equity Distribution Agreements (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Equity Distribution Agreements | ||
Issuance of common shares (in shares) | 1,032 | 24 |
Weighted average price per share (in dollars per share) | $ 26.27 | $ 22.06 |
Net proceeds | $ 26,851 | $ 467 |
Shareholders' Equity - Dividend
Shareholders' Equity - Dividend Reinvestment Program (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Dividend Reinvestment Program | ||
Issuance of common shares (in shares) | 10 | 23 |
Weighted average price per share (in dollars per share) | $ 26.04 | $ 22.07 |
Net proceeds | $ 264 | $ 520 |