Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-34364 | |
Entity Registrant Name | OFFICE PROPERTIES INCOME TRUST | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 26-4273474 | |
Entity Address, Address Line One | Two Newton Place | |
Entity Address, Address Line Two | 255 Washington Street | |
Entity Address, Address Line Three | Suite 300 | |
Entity Address, City or Town | Newton | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02458-1634 | |
City Area Code | 617 | |
Local Phone Number | 219-1440 | |
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 | 48,200,929 | |
Entity Central Index Key | 0001456772 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Common Shares of Beneficial Interest | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Shares of Beneficial Interest | |
Trading Symbol | OPI | |
Security Exchange Name | NASDAQ | |
5.875% Senior Notes due 2046 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 5.875% Senior Notes due 2046 | |
Trading Symbol | OPINI | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Real estate properties: | ||
Land | $ 843,418 | $ 840,550 |
Buildings and improvements | 2,672,467 | 2,652,681 |
Total real estate properties, gross | 3,515,885 | 3,493,231 |
Accumulated depreciation | (403,229) | (387,656) |
Total real estate properties, net | 3,112,656 | 3,105,575 |
Assets of properties held for sale | 0 | 70,877 |
Investments in unconsolidated joint ventures | 39,429 | 39,756 |
Acquired real estate leases, net | 689,512 | 732,382 |
Cash and cash equivalents | 29,657 | 93,744 |
Restricted cash | 4,349 | 6,952 |
Rents receivable | 90,462 | 83,556 |
Deferred leasing costs, net | 42,612 | 40,107 |
Other assets, net | 20,028 | 20,187 |
Total assets | 4,028,705 | 4,193,136 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Unsecured revolving credit facility | 348,000 | 0 |
Senior unsecured notes, net | 1,619,528 | 2,017,379 |
Mortgage notes payable, net | 244,252 | 309,946 |
Liabilities of properties held for sale | 0 | 14,693 |
Accounts payable and other liabilities | 106,066 | 125,048 |
Due to related persons | 7,973 | 7,141 |
Assumed real estate lease obligations, net | 12,512 | 13,175 |
Total liabilities | 2,338,331 | 2,487,382 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common shares of beneficial interest, $.01 par value: 200,000,000 shares authorized, 48,200,929 and 48,201,941 shares issued and outstanding, respectively | 482 | 482 |
Additional paid in capital | 2,612,777 | 2,612,425 |
Cumulative net income | 188,057 | 177,217 |
Cumulative other comprehensive loss | (261) | (200) |
Cumulative common distributions | (1,110,681) | (1,084,170) |
Total shareholders’ equity | 1,690,374 | 1,705,754 |
Total liabilities and shareholders’ equity | $ 4,028,705 | $ 4,193,136 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares of beneficial interest, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common shares of beneficial interest, shares issued (in shares) | 48,200,929 | 48,201,941 |
Common shares of beneficial interest, shares outstanding (in shares) | 48,200,929 | 48,201,941 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Rental income | $ 149,885 | $ 174,777 |
Expenses: | ||
Real estate taxes | 16,807 | 18,392 |
Utility expenses | 7,012 | 9,381 |
Other operating expenses | 25,880 | 30,136 |
Depreciation and amortization | 62,943 | 77,521 |
Loss on impairment of real estate | 0 | 3,204 |
Acquisition and transaction related costs | 0 | 584 |
General and administrative | 7,109 | 8,723 |
Total expenses | 119,751 | 147,941 |
Gain on sale of real estate | 10,756 | 22,092 |
Dividend income | 0 | 980 |
Gain on equity securities | 0 | 22,128 |
Interest and other income | 706 | 248 |
Interest expense (including net amortization of debt premiums, discounts and issuance costs of $2,283 and $2,841, respectively) | (27,159) | (37,133) |
Loss on early extinguishment of debt | (3,282) | (414) |
Income before income tax expense and equity in net losses of investees | 11,155 | 34,737 |
Income tax expense | (39) | (483) |
Equity in net losses of investees | (276) | (235) |
Net income | 10,840 | 34,019 |
Other comprehensive income (loss): | ||
Unrealized loss on financial instrument | (61) | (98) |
Equity in unrealized gain of investees | 0 | 66 |
Other comprehensive loss | (61) | (32) |
Comprehensive income | $ 10,779 | $ 33,987 |
Weighted average common shares outstanding (basic) (in shares) | 48,095 | 48,031 |
Weighted average common shares outstanding (diluted) (in shares) | 48,095 | 48,046 |
Per common share amounts (basic and diluted): | ||
Net income (in dollars per share) | $ 0.23 | $ 0.71 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net amortization of debt premiums and discounts and issuance costs | $ 2,283 | $ 2,841 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Shares | Additional Paid In Capital | Cumulative Net Income | Cumulative Other Comprehensive Income (Loss) | Cumulative Common Distributions |
Balance (in shares) at Dec. 31, 2018 | 48,082,903 | |||||
Balance beginning at Dec. 31, 2018 | $ 1,778,968 | $ 481 | $ 2,609,801 | $ 146,882 | $ 106 | $ (978,302) |
Increase (Decrease) in Shareholders' Equity | ||||||
Share grants (in shares) | 9,000 | |||||
Share grants | 865 | 865 | ||||
Amount reclassified from cumulative other comprehensive income to net income | (371) | (371) | ||||
Net current period other comprehensive loss | (32) | (32) | ||||
Net income | 34,019 | 34,019 | ||||
Distributions to common shareholders | (26,445) | (26,445) | ||||
Balance (in shares) at Mar. 31, 2019 | 48,091,903 | |||||
Balance ending at Mar. 31, 2019 | 1,787,004 | $ 481 | 2,610,666 | 180,901 | (297) | (1,004,747) |
Balance (in shares) at Dec. 31, 2019 | 48,201,941 | |||||
Balance beginning at Dec. 31, 2019 | 1,705,754 | $ 482 | 2,612,425 | 177,217 | (200) | (1,084,170) |
Increase (Decrease) in Shareholders' Equity | ||||||
Share grants | 379 | 379 | ||||
Share repurchases (in shares) | (1,012) | |||||
Share repurchases | (27) | (27) | ||||
Net current period other comprehensive loss | (61) | (61) | ||||
Net income | 10,840 | 10,840 | ||||
Distributions to common shareholders | (26,511) | (26,511) | ||||
Balance (in shares) at Mar. 31, 2020 | 48,200,929 | |||||
Balance ending at Mar. 31, 2020 | $ 1,690,374 | $ 482 | $ 2,612,777 | $ 188,057 | $ (261) | $ (1,110,681) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 10,840 | $ 34,019 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 20,499 | 23,629 |
Net amortization of debt premiums, discounts and issuance costs | 2,283 | 2,841 |
Amortization of acquired real estate leases | 42,457 | 53,837 |
Amortization of deferred leasing costs | 1,665 | 1,350 |
Gain on sale of real estate | (10,756) | (22,092) |
Loss on impairment of real estate | 0 | 3,204 |
Loss on early extinguishment of debt | 2,144 | 414 |
Straight line rental income | (5,583) | (6,794) |
Other non-cash expenses, net | 107 | 593 |
Gain on equity securities | 0 | (22,128) |
Equity in net losses of investees | 276 | 235 |
Change in assets and liabilities: | ||
Rents receivable | (1,087) | 14,390 |
Deferred leasing costs | (4,466) | (7,985) |
Other assets | 180 | 2,873 |
Accounts payable and other liabilities | (21,790) | (30,387) |
Due to related persons | 832 | (29,257) |
Net cash provided by operating activities | 37,601 | 18,742 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Real estate acquisitions | (11,864) | 0 |
Real estate improvements | (14,525) | (12,969) |
Distributions in excess of earnings from unconsolidated joint ventures | 51 | 521 |
Proceeds from sale of properties, net | 68,433 | 262,779 |
Net cash provided by investing activities | 42,095 | 250,331 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of mortgage notes payable | (67,848) | (8,954) |
Repayment of unsecured term loans | 0 | (153,000) |
Repayment of senior unsecured notes | (400,000) | 0 |
Borrowings on unsecured revolving credit facility | 418,467 | 85,000 |
Repayments on unsecured revolving credit facility | (70,467) | (180,000) |
Repurchase of common shares | (27) | 0 |
Distributions to common shareholders | (26,511) | (26,445) |
Net cash used in financing activities | (146,386) | (283,399) |
Decrease in cash, cash equivalents and restricted cash | (66,690) | (14,326) |
Cash, cash equivalents and restricted cash at beginning of period | 100,696 | 38,943 |
Cash, cash equivalents and restricted cash at end of period | 34,006 | 24,617 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Interest paid | 37,715 | 49,545 |
Income taxes paid | 0 | 7 |
NON-CASH INVESTING ACTIVITIES: | ||
Sale of properties | 13,095 | 0 |
NON-CASH FINANCING ACTIVITIES: | ||
Repayment of mortgage notes payable related to properties sold | (13,095) | 0 |
Supplemental Disclosure Of Cash, Cash Equivalents And Restricted Cash [Abstract] | ||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | $ 34,006 | $ 24,617 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of Office Properties Income Trust and its subsidiaries, or OPI, we, us or our, are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2019 , or our 2019 Annual Report. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair statement of results for the interim period have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The preparation of these financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include purchase price allocations, useful lives of fixed assets and assessment of impairment of real estate and the related intangibles. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. We adopted ASU No. 2016-13 on January 1, 2020 using the modified retrospective approach. The implementation of this standard did not have a material impact in our condensed consolidated financial statements. |
Weighted Average Common Shares
Weighted Average Common Shares | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Weighted Average Common Shares | Weighted Average Common Shares The following table provides a reconciliation of the weighted average number of common shares used in the calculation of basic and diluted earnings per share (in thousands): For the Three Months Ended March 31, 2020 2019 Weighted average common shares for basic earnings per share 48,095 48,031 Effect of dilutive securities: unvested share awards — 15 Weighted average common shares for diluted earnings per share (1) 48,095 48,046 (1) For the three months ended March 31, 2020, certain unvested common shares were not included in the calculation of diluted earnings per share because to do so would have been antidilutive. |
Real Estate Properties
Real Estate Properties | 3 Months Ended |
Mar. 31, 2020 | |
Real Estate [Abstract] | |
Real Estate Properties | Real Estate Properties As of March 31, 2020 , our wholly owned properties were comprised of 184 properties with approximately 24.9 million rentable square feet, with an aggregate undepreciated carrying value of $3,515,885 and we had noncontrolling ownership interests in three properties totaling approximately 0.4 million rentable square feet through two unconsolidated joint ventures in which we own 51% and 50% interests. We generally lease space at our properties on a gross lease, modified gross lease or net lease basis pursuant to fixed term contracts expiring between 2020 and 2040 . Some of our leases generally require us to pay all or some property operating expenses and to provide all or most property management services. During the three months ended March 31, 2020 , we entered into 27 leases for 0.6 million rentable square feet for a weighted (by rentable square feet) average lease term of 4.8 years and we made commitments for approximately $12,930 of leasing related costs. As of March 31, 2020 , we have estimated unspent leasing related obligations of $57,348 . We regularly evaluate whether events or changes in circumstances have occurred that could indicate an impairment in the value of our long lived assets. If there is an indication that the carrying value of an asset is not recoverable, we estimate the projected undiscounted cash flows to determine if an impairment loss should be recognized. The future net undiscounted cash flows are subjective and are based in part on assumptions regarding hold periods, market rents and terminal capitalization rates. We determine the amount of any impairment loss by comparing the historical carrying value to estimated fair value. We estimate fair value through an evaluation of recent financial performance and projected discounted cash flows using standard industry valuation techniques. In addition to the consideration of impairment upon the events or changes in circumstances described above, we regularly evaluate the remaining lives of our long lived assets. If we change our estimate of the remaining lives, we allocate the carrying value of the affected assets over their revised remaining lives. Acquisition Activities In February 2020, we acquired a property adjacent to a property we own in Boston, MA for $11,864 , including $364 of acquisition related costs. This acquisition was accounted for as an asset acquisition. The purchase price of this acquisition was allocated to land and building in the amounts of $2,618 and $9,246 , respectively. Disposition Activities During the three months ended March 31, 2020 , we sold six properties with a combined 0.7 million rentable square feet for an aggregate sales price of $85,363 , excluding closing costs and including the repayment of one mortgage note with an outstanding principal balance of $13,095 , an annual interest rate of 5.9% and a maturity date in August 2021. The sales of these properties, as presented in the table below, do not represent significant dispositions individually or in the aggregate nor do they represent a strategic shift in our business. As a result, the results of operations of these properties are included in continuing operations through the date of sale in our condensed consolidated statements of comprehensive income. Date of Sale Number of Properties Location Rentable Square Feet Gross Sales Price (1) Gain (Loss) on Sale of Real Estate January 2020 2 Stafford, VA 64,656 $ 14,063 $ 4,704 January 2020 1 Windsor, CT 97,256 7,000 314 February 2020 1 Lincolnshire, IL 222,717 12,000 1,176 March 2020 1 Trenton, NJ 267,025 30,100 (192 ) March 2020 1 Fairfax, VA 83,130 22,200 4,754 6 734,784 $ 85,363 $ 10,756 (1) Gross sales price is equal to the gross contract price, includes purchase price adjustments, if any, and excludes closing costs. Unconsolidated Joint Ventures We own interests in two joint ventures that own three properties. We account for these investments under the equity method of accounting. As of March 31, 2020 and December 31, 2019 , our investments in unconsolidated joint ventures consisted of the following: OPI Carrying Value of Investments at Joint Venture OPI Ownership March 31, December 31, 2019 Number of Properties Location Rentable Square Feet Prosperity Metro Plaza 51% $ 22,405 $ 22,483 2 Fairfax, VA 328,456 1750 H Street, NW 50% 17,024 17,273 1 Washington, D.C. 115,411 Total $ 39,429 $ 39,756 3 443,867 The following table provides a summary of the mortgage debt of our two unconsolidated joint ventures: Joint Venture Interest Rate (1) Maturity Date Principal Balance at March 31, 2020 and December 31, 2019 (2) Prosperity Metro Plaza 4.09% 12/1/2029 $ 50,000 1750 H Street, NW 3.69% 8/1/2024 32,000 Weighted Average / Total 3.93% $ 82,000 (1) Includes the effect of mark to market purchase accounting. (2) Reflects the entire balance of the debt secured by the properties and is not adjusted to reflect the interests in the joint ventures we do not own. None of the debt is recourse to us. At March 31, 2020 , the aggregate unamortized basis difference of our two unconsolidated joint ventures of $7,828 is primarily attributable to the difference between the amount we paid to purchase our interest in these joint ventures, including transaction costs, and the historical carrying value of the net assets of these joint ventures. This difference is being amortized over the remaining useful life of the related properties and the resulting amortization expense is included in equity in net losses of investees in our condensed consolidated statements of comprehensive income. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases Revenue Recognition. Our leases provide for base rent payments and in addition may include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. In certain circumstances, some leases provide the tenant with the right to terminate if the legislature or other funding authority does not appropriate the funding necessary for the tenant to meet its lease obligations; we have determined the fixed non-cancelable lease term of these leases to be the full term of the lease because we believe the occurrence of early terminations to be remote contingencies based on both our historical experience and our assessments of the likelihood of lease cancellation on a separate lease basis. We increased rental income to record revenue on a straight line basis by $5,583 and $6,794 for the three months ended March 31, 2020 and 2019, respectively. Rents receivable, excluding properties classified as held for sale, include $60,365 and $54,837 of straight line rent receivables at March 31, 2020 and December 31, 2019 , respectively. We do not include in our measurement of our lease receivables certain variable payments, including payments determined by changes in the index or market-based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Such payments totaled $19,746 and $23,394 for the three months ended March 31, 2020 and 2019, respectively, of which tenant reimbursements totaled $18,622 and $22,124 , respectively. As a result of the COVID-19 pandemic, some of our tenants have requested rent assistance. As of April 28, 2020, we have granted temporary rent assistance totaling $ 1,403 to 18 of our tenants who represent approximately 2.4% of our annualized rental income, as defined below, as of March 31, 2020, pursuant to a deferred payment plan whereby these tenants will be obligated to pay, in most cases, the deferred rent over a 12 -month period beginning in September 2020. These deferred amounts did not impact our 2020 first quarter results. Right of Use Asset and Lease Liability . For leases where we are the lessee, we are required to record a right of use asset and lease liability for all leases with a term greater than 12 months. As of March 31, 2020 , we had one lease that met these criteria where we are the lessee, which expires on January 31, 2021. We sublease a portion of the space, which sublease expires on January 31, 2021. The values of the right of use asset and related liability representing our future obligation under the lease arrangement for which we are the lessee were $1,660 and $1,687 , respectively, as of March 31, 2020 , and $2,149 and $2,179 , respectively, as of December 31, 2019. The right of use asset and related lease liability are included within other assets, net and accounts payable and other liabilities, respectively, within our condensed consolidated balance sheets. Rent expense incurred under the lease, net of sublease revenue, was $446 and $434 for the three months ended March 31, 2020 and 2019, respectively. |
Leases | Leases Revenue Recognition. Our leases provide for base rent payments and in addition may include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. In certain circumstances, some leases provide the tenant with the right to terminate if the legislature or other funding authority does not appropriate the funding necessary for the tenant to meet its lease obligations; we have determined the fixed non-cancelable lease term of these leases to be the full term of the lease because we believe the occurrence of early terminations to be remote contingencies based on both our historical experience and our assessments of the likelihood of lease cancellation on a separate lease basis. We increased rental income to record revenue on a straight line basis by $5,583 and $6,794 for the three months ended March 31, 2020 and 2019, respectively. Rents receivable, excluding properties classified as held for sale, include $60,365 and $54,837 of straight line rent receivables at March 31, 2020 and December 31, 2019 , respectively. We do not include in our measurement of our lease receivables certain variable payments, including payments determined by changes in the index or market-based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Such payments totaled $19,746 and $23,394 for the three months ended March 31, 2020 and 2019, respectively, of which tenant reimbursements totaled $18,622 and $22,124 , respectively. As a result of the COVID-19 pandemic, some of our tenants have requested rent assistance. As of April 28, 2020, we have granted temporary rent assistance totaling $ 1,403 to 18 of our tenants who represent approximately 2.4% of our annualized rental income, as defined below, as of March 31, 2020, pursuant to a deferred payment plan whereby these tenants will be obligated to pay, in most cases, the deferred rent over a 12 -month period beginning in September 2020. These deferred amounts did not impact our 2020 first quarter results. Right of Use Asset and Lease Liability . For leases where we are the lessee, we are required to record a right of use asset and lease liability for all leases with a term greater than 12 months. As of March 31, 2020 , we had one lease that met these criteria where we are the lessee, which expires on January 31, 2021. We sublease a portion of the space, which sublease expires on January 31, 2021. The values of the right of use asset and related liability representing our future obligation under the lease arrangement for which we are the lessee were $1,660 and $1,687 , respectively, as of March 31, 2020 , and $2,149 and $2,179 , respectively, as of December 31, 2019. The right of use asset and related lease liability are included within other assets, net and accounts payable and other liabilities, respectively, within our condensed consolidated balance sheets. Rent expense incurred under the lease, net of sublease revenue, was $446 and $434 for the three months ended March 31, 2020 and 2019, respectively. |
Concentration
Concentration | 3 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration | Concentration Tenant Concentration We define annualized rental income as the annualized contractual base rents from our tenants pursuant to our lease agreements as of the measurement date, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization. As of March 31, 2020 , the U.S. Government, 10 state governments and two other government tenants combined were responsible for approximately 34.6% of our annualized rental income. As of March 31, 2019 , the U.S. Government, 13 state governments and three other government tenants combined were responsible for approximately 35.9% of our annualized rental income. The U.S. Government is our largest tenant by annualized rental income and was responsible for approximately 25.0% and 25.8% of our annualized rental income as of March 31, 2020 and 2019 , respectively. Geographic Concentration At March 31, 2020 , our 184 wholly owned properties were located in 34 states and the District of Columbia. Properties located in Virginia , California , the District of Columbia , Texas and Maryland were responsible for 15.2% , 12.1% , 11.0% , 8.2% and 6.4% of our annualized rental income as of March 31, 2020 , respectively. |
Indebtedness
Indebtedness | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness Our principal debt obligations at March 31, 2020 were: (1) $348,000 of outstanding borrowings under our $750,000 unsecured revolving credit facility; (2) $1,660,000 aggregate outstanding principal amount of senior unsecured notes; and (3) $245,266 aggregate outstanding principal amount of mortgage notes. Our $750,000 revolving credit facility is governed by a credit agreement, or our credit agreement, with a syndicate of institutional lenders that includes a feature under which the maximum aggregate borrowing availability may be increased to up to $1,950,000 in certain circumstances. Our $750,000 revolving credit facility is available for general business purposes, including acquisitions. The maturity date of our revolving credit facility is January 31, 2023 and, subject to our payment of an extension fee and meeting certain other conditions, we have the option to extend the stated maturity date of our revolving credit facility by two additional six month periods. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity and no principal repayment is due until maturity. We are required to pay interest at a rate of LIBOR plus a premium, which was 110 basis points per annum at March 31, 2020 , on the amount outstanding under our revolving credit facility. We also pay a facility fee on the total amount of lending commitments under our revolving credit facility, which was 25 basis points per annum at March 31, 2020 . Both the interest rate premium and facility fee are subject to adjustment based upon changes to our credit ratings. As of March 31, 2020 and December 31, 2019, the annual interest rate payable on borrowings under our revolving credit facility was 1.8% and 2.7% , respectively. The weighted average annual interest rate for borrowings under our revolving credit facility was 2.6% and 3.5% for the three months ended March 31, 2020 and 2019 , respectively. As of March 31, 2020 and April 30, 2020, we had $348,000 and $355,000 , respectively, outstanding under our revolving credit facility, and $402,000 and $395,000 , respectively, available for borrowing under our revolving credit facility. In January 2020, we redeemed, at par plus accrued interest, all $400,000 of our 3.60% senior unsecured notes due 2020. As a result of the redemption of our 3.60% senior unsecured notes due 2020, we recognized a loss on early extinguishment of debt of $61 during the three months ended March 31, 2020, to write off unamortized discounts. Our credit agreement and senior unsecured notes indentures and their supplements provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes The RMR Group LLC, or RMR LLC, ceasing to act as our business and property manager. Our credit agreement and senior unsecured notes indentures and their supplements also contain covenants, including covenants that restrict our ability to incur debts, require us to comply with certain financial covenants and, in the case of our credit agreement, restrict our ability to make distributions under certain circumstances. We believe we were in compliance with the terms and conditions of the respective covenants under our credit agreement and senior unsecured notes indentures and their supplements at March 31, 2020 . In March 2020, in connection with the sale of one property, we prepaid, at a premium plus accrued interest, a mortgage note secured by that property with an outstanding principal balance of $13,095 , an annual interest rate of 5.9% and a maturity date in August 2021, which was classified in liabilities of properties held for sale in our condensed consolidated balance sheet as of December 31, 2019. As a result of the prepayment of this mortgage note, we recognized a loss on early extinguishment of debt of $508 during the three months ended March 31, 2020, from a prepayment penalty and the write off of unamortized debt issuance costs. In March 2020, we prepaid, at a premium plus accrued interest, a mortgage note secured by one property with an outstanding principal balance of $66,780 , an annual interest rate of 4.0% and a maturity date in September 2030. As a result of the prepayment of this mortgage note, we recognized a loss on early extinguishment of debt of $2,713 during the three months ended March 31, 2020, from a prepayment penalty and the write off of unamortized discounts. In April 2020, we prepaid, at par plus accrued interest, a mortgage note secured by one property with an outstanding principal balance of $32,677 , an annual interest rate of 5.7% and a maturity date in July 2020. At March 31, 2020 , nine of our consolidated properties with an aggregate net book value of $495,229 were encumbered by mortgage notes with an aggregate principal amount of $245,266 . Our mortgage notes are non-recourse, subject to certain limited exceptions and do not contain any material financial covenants. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities Our financial instruments include our cash and cash equivalents, restricted cash, rents receivable, a mortgage note receivable, accounts payable, a revolving credit facility, senior unsecured notes, mortgage notes payable, amounts due to related persons, other accrued expenses and security deposits. At March 31, 2020 and December 31, 2019, the fair values of our financial instruments approximated their carrying values in our condensed consolidated financial statements, due to their short term nature or floating interest rates, except as follows: As of March 31, 2020 As of December 31, 2019 Financial Instrument Carrying Value (1) Fair Value Carrying Value (1) Fair Value Senior unsecured notes, 3.60% interest rate, due in 2020 $ — $ — $ 399,934 $ 400,048 Senior unsecured notes, 4.00% interest rate, due in 2022 297,887 294,464 297,657 306,096 Senior unsecured notes, 4.15% interest rate, due in 2022 298,059 292,616 297,795 307,221 Senior unsecured notes, 4.25% interest rate, due in 2024 340,588 337,227 340,018 364,602 Senior unsecured notes, 4.50% interest rate, due in 2025 381,987 361,020 381,055 419,578 Senior unsecured notes, 5.875% interest rate, due in 2046 301,007 248,000 300,920 322,028 Mortgage notes payable (2) 244,252 254,619 323,074 331,675 Total $ 1,863,780 $ 1,787,946 $ 2,340,453 $ 2,451,248 (1) Includes unamortized debt premiums, discounts and issuance costs totaling $41,486 and $45,756 as of March 31, 2020 and December 31, 2019, respectively. (2) Balance as of December 31, 2019 includes one mortgage note with a carrying value of $13,128 net of unamortized issuance costs totaling $38 which is classified in liabilities of properties held for sale in our condensed consolidated balance sheet. This mortgage note was secured by a property in Fairfax, VA that was sold in March 2020. The mortgage note was repaid at closing. We estimated the fair value of our senior unsecured notes (except for our senior unsecured notes due 2046) using an average of the bid and ask price of the notes (Level 2 inputs as defined in the fair value hierarchy under GAAP) as of the measurement date. We estimated the fair value of our senior unsecured notes due 2046 based on the closing price on The Nasdaq Stock Market LLC, or Nasdaq, (Level 1 inputs as defined in the fair value hierarchy under GAAP) as of the measurement date. We estimated the fair values of our mortgage notes payable using discounted cash flow analyses and currently prevailing market rates (Level 3 inputs as defined in the fair value hierarchy under GAAP) as of the measurement date. Because Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Share Purchases On January 9, 2020 and March 13, 2020, we purchased an aggregate of 410 and 602 of our common shares, respectively, valued at $32.89 and $22.65 per share, respectively, the closing prices of our common shares on Nasdaq on those days, from certain former officers and employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. Distributions During the three months ended March 31, 2020 , we declared and paid a regular quarterly distribution to common shareholders as follows: Declaration Date Record Date Paid Date Distribution Per Common Share Total Distribution January 16, 2020 January 27, 2020 February 20, 2020 $ 0.55 $ 26,511 On April 2, 2020 , we declared a regular quarterly distribution to common shareholders of record on April 13, 2020 of $0.55 per share, or approximately $26,500 . We expect to pay this distribution on or about May 21, 2020 . |
Business and Property Managemen
Business and Property Management Agreements with RMR LLC | 3 Months Ended |
Mar. 31, 2020 | |
Property Management Fee [Abstract] | |
Business and Property Management Agreements with RMR LLC | Business and Property Management Agreements with RMR LLC We have no employees. The personnel and various services we require to operate our business are provided to us by RMR LLC. We have two agreements with RMR LLC to provide management services to us: (1) a business management agreement, which relates to our business generally; and (2) a property management agreement, which relates to our property level operations. Pursuant to our business management agreement with RMR LLC, we recognized net business management fees of $4,699 and $5,722 for the three months ended March 31, 2020 and 2019 , respectively. Based on our common share total return, as defined in our business management agreement, as of March 31, 2020 and 2019, no estimated incentive fees are included in the net business management fees we recognized for the three months ended March 31, 2020 or 2019. The actual amount of annual incentive fees for 2020, if any, will be based on our common share total return, as defined in our business management agreement, for the three year period ending December 31, 2020, and will be payable in 2021. We did no t incur an incentive fee payable to RMR LLC for the year ended December 31, 2019. We include business management fees in general and administrative expenses in our condensed consolidated statements of comprehensive income. Pursuant to our property management agreement with RMR LLC, we recognized aggregate net property management and construction supervision fees of $5,064 and $5,449 for the three months ended March 31, 2020 and 2019 , respectively. These amounts are included in other operating expenses or have been capitalized, as appropriate, in our condensed consolidated financial statements. We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR LLC on our behalf. We are generally not responsible for payment of RMR LLC’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR LLC’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR LLC’s centralized accounting personnel, our share of RMR LLC’s costs for providing our internal audit function and as otherwise agreed. Our property level operating expenses are generally incorporated into the rents charged to our tenants, including certain payroll and related costs incurred by RMR LLC. We reimbursed RMR LLC $5,991 and $6,624 for these expenses and costs for the three months ended March 31, 2020 and 2019 , respectively. We included these amounts in other operating expenses and general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income. |
Related Person Transactions
Related Person Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions We have relationships and historical and continuing transactions with RMR LLC, The RMR Group Inc., or RMR Inc., and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR LLC is a majority owned subsidiary of RMR Inc. The Chair of our Board of Trustees and one of our Managing Trustees, Adam Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., a managing director, the president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. David Blackman, our other Managing Trustee and President and Chief Executive Officer, also serves as an executive officer of RMR LLC, and each of our other officers is also an officer and employee of RMR LLC. Some of our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR LLC or its subsidiaries provide management services. Adam Portnoy serves as chair of the boards of trustees or boards of directors of several of these public companies and as a managing director or managing trustee of these public companies. Other officers of RMR LLC, including Mr. Blackman and certain of our other officers, serve as managing trustees, managing directors or officers of certain of these companies. Our Manager, RMR LLC. We have two agreements with RMR LLC to provide management services to us. For more information regarding our management agreements with RMR LLC, see Note 10. Leases with RMR LLC. We lease office space to RMR LLC in certain of our properties for RMR LLC’s property management offices. Pursuant to our lease agreements with RMR LLC, we recognized rental income from RMR LLC for leased office space of $280 and $279 for the three months ended March 31, 2020 and 2019 , respectively. Affiliates Insurance Company, or AIC . Until its dissolution on February 13, 2020 we, ABP Trust and five other companies to which RMR LLC provides management services owned AIC in equal amounts. We and the other AIC shareholders historically participated in a combined property insurance program arranged and insured or reinsured in part by AIC. The policies under that program expired on June 30, 2019, and we and the other AIC shareholders elected not to renew the AIC property insurance program; we have instead purchased standalone property insurance coverage with unrelated third party insurance providers. As of March 31, 2020 and December 31, 2019, our investment in AIC had a carrying value of $298 . These amounts are included in other assets, net in our condensed consolidated balance sheets. We did no t recognize any income related to our investment in AIC for the three months ended March 31, 2020 and recognized income of $404 for the three months ended March 31, 2019, which is presented as equity in net losses of investees in our condensed consolidated statements of comprehensive income. Our other comprehensive loss for the 2019 period includes our proportionate part of unrealized gains (losses) on fixed income securities, which are owned by AIC, related to our investment in AIC. For more information about these and other such relationships and certain other related person transactions, refer to our 2019 Annual Report. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Weighted Average Common Shares
Weighted Average Common Shares (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Schedule of earnings per share, basic and diluted | The following table provides a reconciliation of the weighted average number of common shares used in the calculation of basic and diluted earnings per share (in thousands): For the Three Months Ended March 31, 2020 2019 Weighted average common shares for basic earnings per share 48,095 48,031 Effect of dilutive securities: unvested share awards — 15 Weighted average common shares for diluted earnings per share (1) 48,095 48,046 (1) For the three months ended March 31, 2020, certain unvested common shares were not included in the calculation of diluted earnings per share because to do so would have been antidilutive. |
Real Estate Properties (Tables)
Real Estate Properties (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Real Estate [Abstract] | |
Schedule of disposed assets | The sales of these properties, as presented in the table below, do not represent significant dispositions individually or in the aggregate nor do they represent a strategic shift in our business. As a result, the results of operations of these properties are included in continuing operations through the date of sale in our condensed consolidated statements of comprehensive income. Date of Sale Number of Properties Location Rentable Square Feet Gross Sales Price (1) Gain (Loss) on Sale of Real Estate January 2020 2 Stafford, VA 64,656 $ 14,063 $ 4,704 January 2020 1 Windsor, CT 97,256 7,000 314 February 2020 1 Lincolnshire, IL 222,717 12,000 1,176 March 2020 1 Trenton, NJ 267,025 30,100 (192 ) March 2020 1 Fairfax, VA 83,130 22,200 4,754 6 734,784 $ 85,363 $ 10,756 (1) Gross sales price is equal to the gross contract price, includes purchase price adjustments, if any, and excludes closing costs. |
Schedule of joint ventures | As of March 31, 2020 and December 31, 2019 , our investments in unconsolidated joint ventures consisted of the following: OPI Carrying Value of Investments at Joint Venture OPI Ownership March 31, December 31, 2019 Number of Properties Location Rentable Square Feet Prosperity Metro Plaza 51% $ 22,405 $ 22,483 2 Fairfax, VA 328,456 1750 H Street, NW 50% 17,024 17,273 1 Washington, D.C. 115,411 Total $ 39,429 $ 39,756 3 443,867 The following table provides a summary of the mortgage debt of our two unconsolidated joint ventures: Joint Venture Interest Rate (1) Maturity Date Principal Balance at March 31, 2020 and December 31, 2019 (2) Prosperity Metro Plaza 4.09% 12/1/2029 $ 50,000 1750 H Street, NW 3.69% 8/1/2024 32,000 Weighted Average / Total 3.93% $ 82,000 (1) Includes the effect of mark to market purchase accounting. (2) Reflects the entire balance of the debt secured by the properties and is not adjusted to reflect the interests in the joint ventures we do not own. None of the debt is recourse to us. |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value and carrying value of financial instruments | At March 31, 2020 and December 31, 2019, the fair values of our financial instruments approximated their carrying values in our condensed consolidated financial statements, due to their short term nature or floating interest rates, except as follows: As of March 31, 2020 As of December 31, 2019 Financial Instrument Carrying Value (1) Fair Value Carrying Value (1) Fair Value Senior unsecured notes, 3.60% interest rate, due in 2020 $ — $ — $ 399,934 $ 400,048 Senior unsecured notes, 4.00% interest rate, due in 2022 297,887 294,464 297,657 306,096 Senior unsecured notes, 4.15% interest rate, due in 2022 298,059 292,616 297,795 307,221 Senior unsecured notes, 4.25% interest rate, due in 2024 340,588 337,227 340,018 364,602 Senior unsecured notes, 4.50% interest rate, due in 2025 381,987 361,020 381,055 419,578 Senior unsecured notes, 5.875% interest rate, due in 2046 301,007 248,000 300,920 322,028 Mortgage notes payable (2) 244,252 254,619 323,074 331,675 Total $ 1,863,780 $ 1,787,946 $ 2,340,453 $ 2,451,248 (1) Includes unamortized debt premiums, discounts and issuance costs totaling $41,486 and $45,756 as of March 31, 2020 and December 31, 2019, respectively. (2) Balance as of December 31, 2019 includes one mortgage note with a carrying value of $13,128 net of unamortized issuance costs totaling $38 which is classified in liabilities of properties held for sale in our condensed consolidated balance sheet. This mortgage note was secured by a property in Fairfax, VA that was sold in March 2020. The mortgage note was repaid at closing. |
Weighted Average Common Share_2
Weighted Average Common Shares (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||
Weighted average common shares for basic earnings per share (in shares) | 48,095 | 48,031 |
Effect of dilutive securities: unvested share awards (in shares) | 0 | 15 |
Weighted average common shares for diluted earnings per share (in shares) | 48,095 | 48,046 |
Real Estate Properties - Additi
Real Estate Properties - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Feb. 29, 2020USD ($) | Mar. 31, 2020USD ($)ft²leasepropertyjoint_venture | Mar. 31, 2019USD ($) | |
Real Estate Properties [Line Items] | |||
Real estate held for sale | $ 3,515,885 | ||
Number of joint ventures | joint_venture | 2 | ||
Number of leases entered | lease | 27 | ||
Rentable square feet (in sqft) | ft² | 600,000 | ||
Weighted average lease term | 4 years 9 months 18 days | ||
Expenditures committed on leases | $ 12,930 | ||
Committed but unspent tenant related obligations estimated | 57,348 | ||
Payments to acquire real estate | $ 11,864 | $ 0 | |
Continuing operations | |||
Real Estate Properties [Line Items] | |||
Number of properties | property | 184 | ||
Rentable area of properties (in square feet) | ft² | 24,900,000 | ||
Unconsolidated Joint Ventures | |||
Real Estate Properties [Line Items] | |||
Number of properties | property | 3 | ||
Rentable area of properties (in square feet) | ft² | 443,867 | ||
Number of buildings, noncontrolling interest | property | 3 | ||
Joint Venture 2 | |||
Real Estate Properties [Line Items] | |||
Ownership percentage | 51.00% | ||
Joint Venture 1 | |||
Real Estate Properties [Line Items] | |||
Ownership percentage | 50.00% | ||
Boston, MA | |||
Real Estate Properties [Line Items] | |||
Payments to acquire real estate | $ 11,864 | ||
Acquisition related costs | 364 | ||
Land | Boston, MA | |||
Real Estate Properties [Line Items] | |||
Purchase price of asset acquisition | 2,618 | ||
Building | Boston, MA | |||
Real Estate Properties [Line Items] | |||
Purchase price of asset acquisition | $ 9,246 |
Real Estate Properties - Dispos
Real Estate Properties - Disposition Activities (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)ft²property | Mar. 31, 2019USD ($) | |
Real Estate Properties [Line Items] | ||
Gain (Loss) on Sale of Real Estate | $ 10,756 | $ 22,092 |
Disposed of by Sale | ||
Real Estate Properties [Line Items] | ||
Number of Properties | property | 6 | |
Rentable area of properties (in square feet) | ft² | 734,784 | |
Gross Sale Price | $ 85,363 | |
Gain (Loss) on Sale of Real Estate | $ 10,756 | |
Disposed of by Sale | Stafford, VA | ||
Real Estate Properties [Line Items] | ||
Number of Properties | property | 2 | |
Rentable area of properties (in square feet) | ft² | 64,656 | |
Gross Sale Price | $ 14,063 | |
Gain (Loss) on Sale of Real Estate | $ 4,704 | |
Disposed of by Sale | Windsor, CT | ||
Real Estate Properties [Line Items] | ||
Number of Properties | property | 1 | |
Rentable area of properties (in square feet) | ft² | 97,256 | |
Gross Sale Price | $ 7,000 | |
Gain (Loss) on Sale of Real Estate | $ 314 | |
Disposed of by Sale | Lincolnshire, IL | ||
Real Estate Properties [Line Items] | ||
Number of Properties | property | 1 | |
Rentable area of properties (in square feet) | ft² | 222,717 | |
Gross Sale Price | $ 12,000 | |
Gain (Loss) on Sale of Real Estate | $ 1,176 | |
Disposed of by Sale | Trenton, NJ | ||
Real Estate Properties [Line Items] | ||
Number of Properties | property | 1 | |
Rentable area of properties (in square feet) | ft² | 267,025 | |
Gross Sale Price | $ 30,100 | |
Gain (Loss) on Sale of Real Estate | $ (192) | |
Disposed of by Sale | Fairfax, VA | ||
Real Estate Properties [Line Items] | ||
Number of Properties | property | 1 | |
Rentable area of properties (in square feet) | ft² | 83,130 | |
Gross Sale Price | $ 22,200 | |
Gain (Loss) on Sale of Real Estate | 4,754 | |
Mortgage notes payable, 5.9% interest rate, due in 2021 | Mortgages | ||
Real Estate Properties [Line Items] | ||
Principal balance | $ 13,095 | |
Interest rate (as a percent) | 5.90% |
Real Estate Properties - Schedu
Real Estate Properties - Schedule of Joint Ventures (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)ft²propertyjoint_venture | Dec. 31, 2019USD ($) | |
Real Estate [Line Items] | ||
Number of joint ventures | joint_venture | 2 | |
Unconsolidated Joint Ventures | ||
Real Estate [Line Items] | ||
Number of Properties | property | 3 | |
Investment at carrying value | $ 39,429 | $ 39,756 |
Rentable Square Feet (in square feet) | ft² | 443,867 | |
Unamortized basis difference | $ 7,828 | |
Unconsolidated Joint Ventures | Prosperity Metro Plaza | ||
Real Estate [Line Items] | ||
Number of Properties | property | 2 | |
Ownership percentage | 51.00% | |
Investment at carrying value | $ 22,405 | 22,483 |
Rentable Square Feet (in square feet) | ft² | 328,456 | |
Unconsolidated Joint Ventures | 1750 H Street, NW | ||
Real Estate [Line Items] | ||
Number of Properties | property | 1 | |
Ownership percentage | 50.00% | |
Investment at carrying value | $ 17,024 | $ 17,273 |
Rentable Square Feet (in square feet) | ft² | 115,411 | |
Mortgages | Unconsolidated Joint Ventures | ||
Real Estate [Line Items] | ||
Interest rate (as a percent) | 3.93% | |
Principal balance | $ 82,000 | |
Mortgages | Unconsolidated Joint Ventures | Prosperity Metro Plaza | ||
Real Estate [Line Items] | ||
Interest rate (as a percent) | 4.09% | |
Principal balance | $ 50,000 | |
Mortgages | Unconsolidated Joint Ventures | 1750 H Street, NW | ||
Real Estate [Line Items] | ||
Interest rate (as a percent) | 3.69% | |
Principal balance | $ 32,000 |
Leases - Lease Receivables (Det
Leases - Lease Receivables (Details) $ in Thousands | Apr. 28, 2020USD ($)tenant | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) |
Subsequent Event [Line Items] | ||||
Straight line rent adjustments | $ 5,583 | $ 6,794 | ||
Straight line rent receivables | 60,365 | $ 54,837 | ||
Variable lease, income | 19,746 | 23,394 | ||
Tenant reimbursements and other income | $ 18,622 | $ 22,124 | ||
COVID-19 Pandemic | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Temporary rental assistance | $ 1,403 | |||
Number of tenants granted rent assistance | tenant | 18 | |||
Percentage of annualized rental income | 2.40% | |||
Deferred payment plan period | 12 months |
Leases - Right of Use Asset and
Leases - Right of Use Asset and Lease Liability (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)lease | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Leases [Abstract] | |||
Number of leases | lease | 1 | ||
Operating lease, right-of-use asset | $ 1,660 | $ 2,149 | |
Operating lease liability | 1,687 | $ 2,179 | |
Operating lease, rent expense | $ 446 | $ 434 |
Concentration (Details)
Concentration (Details) | 3 Months Ended | |
Mar. 31, 2020statepropertygovernment_tenantstate_government | Mar. 31, 2019government_tenantstate_government | |
Concentration | ||
Number of state governments | 13 | |
Number of other governments | government_tenant | 2 | 3 |
Annualized rental income, excluding properties classified as discontinued operations | Virginia | ||
Concentration | ||
Concentration risk percentage | 15.20% | |
Annualized rental income, excluding properties classified as discontinued operations | California | ||
Concentration | ||
Concentration risk percentage | 12.10% | |
Annualized rental income, excluding properties classified as discontinued operations | District of Columbia | ||
Concentration | ||
Concentration risk percentage | 11.00% | |
Annualized rental income, excluding properties classified as discontinued operations | Texas | ||
Concentration | ||
Concentration risk percentage | 8.20% | |
Annualized rental income, excluding properties classified as discontinued operations | Maryland | ||
Concentration | ||
Concentration risk percentage | 6.40% | |
Annualized rental income, excluding properties classified as discontinued operations | Tenant concentration | U.S. Government, state governments and Other Four Government | ||
Concentration | ||
Number of state governments | 10 | |
Concentration risk percentage | 34.60% | 35.90% |
Annualized rental income, excluding properties classified as discontinued operations | Tenant concentration | U.S. Government | ||
Concentration | ||
Concentration risk percentage | 25.00% | 25.80% |
Continuing operations | ||
Concentration | ||
Number of wholly owned properties | property | 184 | |
Number of states in which acquired properties located | state | 34 |
Indebtedness - Debt Obligations
Indebtedness - Debt Obligations (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Apr. 30, 2020USD ($) | Mar. 31, 2020USD ($)propertyextension_optionbuilding | Jan. 31, 2020USD ($) | Mar. 31, 2020USD ($)propertyextension_optionbuilding | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | ||||||
Borrowings outstanding | $ 348,000 | $ 348,000 | $ 0 | |||
Aggregate principal amount on secured properties | $ 245,266 | 245,266 | ||||
Loss on early extinguishment of debt | $ (3,282) | $ (414) | ||||
Number of properties sold | property | 1 | 1 | ||||
Number of buildings secured by mortgage notes | building | 9 | 9 | ||||
Aggregate net book value of secured properties | $ 495,229 | $ 495,229 | ||||
Senior unsecured notes, 3.60% interest rate, due in 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (as a percent) | 3.60% | 3.60% | ||||
Unsecured revolving credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Borrowings outstanding | $ 348,000 | $ 348,000 | ||||
Maximum borrowing capacity on revolving credit facility | 750,000 | 750,000 | ||||
Aggregate principal amount on secured properties | $ 1,950,000 | $ 1,950,000 | ||||
Number of extension options | extension_option | 2 | 2 | ||||
Interest rate (as a percent) | 1.80% | 1.80% | 2.70% | |||
The weighted average annual interest rate (as a percent) | 2.60% | 3.50% | ||||
Extension option duration | 6 months | |||||
Facility fee (as a percent) | 0.25% | |||||
Remaining borrowing capacity | $ 402,000 | $ 402,000 | ||||
Senior unsecured notes | ||||||
Debt Instrument [Line Items] | ||||||
Borrowings outstanding | 1,660,000 | $ 1,660,000 | ||||
LIBOR | Unsecured revolving credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate premium (as a percent) | 1.10% | |||||
Senior unsecured notes | Senior unsecured notes, 3.60% interest rate, due in 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (as a percent) | 3.60% | |||||
Repayments of debt | $ 400,000 | |||||
Loss on early extinguishment of debt | $ 61 | |||||
Mortgages | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding principal amount | $ 245,266 | $ 245,266 | ||||
Mortgages | Mortgage notes payable, 5.9% interest rate, due in 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (as a percent) | 5.90% | 5.90% | ||||
Repayments of debt | $ 13,095 | |||||
Loss on early extinguishment of debt | $ 508 | |||||
Mortgages | Mortgage notes payable, 4.0% interest rate, due in 2030 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (as a percent) | 4.00% | 4.00% | ||||
Repayments of debt | $ 66,780 | |||||
Loss on early extinguishment of debt | $ 2,713 | |||||
Mortgages | Mortgage notes payable, 5.7% interest rate, due in 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (as a percent) | 5.70% | 5.70% | ||||
Subsequent Event | Unsecured revolving credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Borrowings outstanding | $ 355,000 | |||||
Remaining borrowing capacity | 395,000 | |||||
Subsequent Event | Mortgages | Mortgage notes payable, 5.7% interest rate, due in 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt | $ 32,677 |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities - Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value of Financial Instruments | ||
Senior notes | $ 1,619,528 | $ 2,017,379 |
Mortgage notes payable, net | $ 244,252 | 309,946 |
Senior unsecured notes, 3.60% interest rate, due in 2020 | ||
Fair Value of Financial Instruments | ||
Interest rate (as a percent) | 3.60% | |
Senior unsecured notes, 4.00% interest rate, due in 2022 | ||
Fair Value of Financial Instruments | ||
Interest rate (as a percent) | 4.00% | |
Senior unsecured notes, 4.15% interest rate, due in 2022 | ||
Fair Value of Financial Instruments | ||
Interest rate (as a percent) | 4.15% | |
Senior unsecured notes, 4.25% interest rate, due in 2024 | ||
Fair Value of Financial Instruments | ||
Interest rate (as a percent) | 4.25% | |
Senior unsecured notes, 4.50% interest rate, due in 2025 | ||
Fair Value of Financial Instruments | ||
Interest rate (as a percent) | 4.50% | |
Senior unsecured notes, 5.875% interest rate, due in 2046 | ||
Fair Value of Financial Instruments | ||
Interest rate (as a percent) | 5.875% | |
Carrying Amount | ||
Fair Value of Financial Instruments | ||
Mortgage notes payable, net | $ 244,252 | 323,074 |
Fair value of financial instruments | 1,863,780 | 2,340,453 |
Carrying Amount | Senior unsecured notes, 3.60% interest rate, due in 2020 | ||
Fair Value of Financial Instruments | ||
Senior notes | 0 | 399,934 |
Carrying Amount | Senior unsecured notes, 4.00% interest rate, due in 2022 | ||
Fair Value of Financial Instruments | ||
Senior notes | 297,887 | 297,657 |
Carrying Amount | Senior unsecured notes, 4.15% interest rate, due in 2022 | ||
Fair Value of Financial Instruments | ||
Senior notes | 298,059 | 297,795 |
Carrying Amount | Senior unsecured notes, 4.25% interest rate, due in 2024 | ||
Fair Value of Financial Instruments | ||
Senior notes | 340,588 | 340,018 |
Carrying Amount | Senior unsecured notes, 4.50% interest rate, due in 2025 | ||
Fair Value of Financial Instruments | ||
Senior notes | 381,987 | 381,055 |
Carrying Amount | Senior unsecured notes, 5.875% interest rate, due in 2046 | ||
Fair Value of Financial Instruments | ||
Senior notes | 301,007 | 300,920 |
Fair Value | ||
Fair Value of Financial Instruments | ||
Mortgage notes payable, net | 254,619 | 331,675 |
Fair value of financial instruments | 1,787,946 | 2,451,248 |
Fair Value | Senior unsecured notes, 3.60% interest rate, due in 2020 | ||
Fair Value of Financial Instruments | ||
Senior notes | 0 | 400,048 |
Fair Value | Senior unsecured notes, 4.00% interest rate, due in 2022 | ||
Fair Value of Financial Instruments | ||
Senior notes | 294,464 | 306,096 |
Fair Value | Senior unsecured notes, 4.15% interest rate, due in 2022 | ||
Fair Value of Financial Instruments | ||
Senior notes | 292,616 | 307,221 |
Fair Value | Senior unsecured notes, 4.25% interest rate, due in 2024 | ||
Fair Value of Financial Instruments | ||
Senior notes | 337,227 | 364,602 |
Fair Value | Senior unsecured notes, 4.50% interest rate, due in 2025 | ||
Fair Value of Financial Instruments | ||
Senior notes | 361,020 | 419,578 |
Fair Value | Senior unsecured notes, 5.875% interest rate, due in 2046 | ||
Fair Value of Financial Instruments | ||
Senior notes | 248,000 | 322,028 |
Senior Notes And Mortgages | ||
Fair Value of Financial Instruments | ||
Unamortized debt premiums, discounts and issuance costs | 41,486 | 45,756 |
Mortgages | ||
Fair Value of Financial Instruments | ||
Outstanding principal amount | $ 245,266 | |
Held-for-sale | Mortgages | ||
Fair Value of Financial Instruments | ||
Outstanding principal amount | 13,128 | |
Unamortized debt issuance expense | $ 38 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 02, 2020 | Mar. 13, 2020 | Jan. 09, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Share Awards | |||||
Cash distribution to common shareholders (in dollars per share) | $ 0.55 | ||||
Distributions to common shareholders | $ 26,511 | $ 26,445 | |||
Subsequent Event | |||||
Share Awards | |||||
Dividends declared (in dollars per share) | $ 0.55 | ||||
Dividends declared | $ 26,500 | ||||
Former Employee of RMR LLC | |||||
Share Awards | |||||
Share repurchases (in shares) | 602 | 410 | |||
Share repurchase price (in dollars per share) | $ 22.65 | $ 32.89 |
Business and Property Managem_2
Business and Property Management Agreements with RMR LLC (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)employeeagreement | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
RMR LLC | |||
Related Party Transaction [Line Items] | |||
Incentive fee (reversal) | $ 0 | ||
RMR LLC | |||
Related Party Transaction [Line Items] | |||
Number of employees | employee | 0 | ||
Number of agreements | agreement | 2 | ||
Reimbursement expense | $ 5,991 | $ 6,624 | |
RMR LLC | Net Property Management and Construction Supervision Fees | |||
Related Party Transaction [Line Items] | |||
Related party expense | 4,699 | 5,722 | |
Related party transaction amount | $ 5,064 | $ 5,449 |
Related Person Transactions (De
Related Person Transactions (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)agreement | Mar. 31, 2019USD ($) | Feb. 13, 2020company | |
Related Party Transaction [Line Items] | |||
Equity in net losses of investees | $ (276) | $ (235) | |
RMR LLC | |||
Related Party Transaction [Line Items] | |||
Number of agreements | agreement | 2 | ||
Revenue from related party | $ 280 | 279 | |
AIC | |||
Related Party Transaction [Line Items] | |||
Number of entities to whom services are provided | company | 5 | ||
Carrying value of equity method investments | 298 | ||
Equity in net losses of investees | $ 0 | $ 404 |
Uncategorized Items - opi033120
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 4,349,000 |
Restricted Cash | us-gaap_RestrictedCash | $ 4,464,000 |