Document and Entity Information
Document and Entity Information Document - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 29, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Commission File Number | 1-07533 | |
Name of Registrant | FEDERAL REALTY INVESTMENT TRUST | |
State of Organization | MD | |
IRS Employer Identification No. | 52-0782497 | |
Entity Address, Address | 1626 East Jefferson Street | |
Entity Address, City | Rockville | |
Entity Address, State | MD | |
Entity Address, Zip Code | 20852 | |
Registrant's Telephone Area Code | 301 | |
Registrant's Telephone Number | 998-8100 | |
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 | 74,954,462 | |
Entity Central Index Key | 0000034903 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Common Shares of Beneficial Interest | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Shares of Beneficial Interest | |
Trading Symbol | FRT | |
Security Exchange Name | NYSE | |
5.0% Series C Cumulative Redeemable Preferred | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Depositary Shares, each representing 1/1000 of a share | |
Trading Symbol | FRT-C | |
Security Exchange Name | NYSE |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Operating (including $1,703,069 and $1,701,804 of consolidated variable interest entities, respectively) | $ 7,293,212 | $ 7,307,622 |
Construction-in-progress (including $78,633 and $51,313 of consolidated variable interest entities, respectively) | 575,229 | 495,274 |
Assets held for sale | 5,938 | 16,576 |
Real estate, at cost, total | 7,874,379 | 7,819,472 |
Less accumulated depreciation and amortization (including $312,416 and $292,374 of consolidated variable interest entities, respectively) | (2,148,010) | (2,059,143) |
Net real estate | 5,726,369 | 5,760,329 |
Cash and cash equivalents | 105,903 | 64,087 |
Accounts and notes receivable, net | 138,870 | 142,237 |
Mortgage notes receivable, net | 30,429 | 30,429 |
Investment in partnerships | 30,800 | 26,859 |
Operating lease right of use assets | 94,828 | 0 |
Finance lease right of use assets | 53,044 | 0 |
Prepaid expenses and other assets | 203,498 | 265,703 |
TOTAL ASSETS | 6,383,741 | 6,289,644 |
Liabilities | ||
Mortgages payable, net (including $441,469 and $444,388 of consolidated variable interest entities, respectively) | 450,883 | 474,379 |
Capital lease obligations | 0 | 71,519 |
Notes payable, net | 4,163 | 279,027 |
Senior notes and debentures, net | 2,702,737 | 2,404,279 |
Accounts payable and accrued expenses | 177,078 | 177,922 |
Dividends payable | 78,808 | 78,207 |
Security deposits payable | 20,588 | 17,875 |
Operating lease liabilities | 74,536 | 0 |
Finance lease liabilities | 72,068 | 0 |
Other liabilities and deferred credits | 157,524 | 182,898 |
Total liabilities | 3,738,385 | 3,686,106 |
Commitments and contingencies (Note 6) | ||
Redeemable noncontrolling interests | 134,710 | 136,208 |
Shareholders’ equity | ||
Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 74,950,197 and 74,249,633 shares issued and outstanding, respectively | 752 | 745 |
Additional paid-in capital | 3,088,946 | 3,004,442 |
Accumulated dividends in excess of net income | (841,505) | (818,877) |
Accumulated other comprehensive loss | (1,024) | (416) |
Total shareholders’ equity of the Trust | 2,407,166 | 2,345,891 |
Noncontrolling interests | 103,480 | 121,439 |
Total shareholders’ equity | 2,510,646 | 2,467,330 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 6,383,741 | 6,289,644 |
5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation preference $25,000 per share), 6,000 shares issued and outstanding | ||
Shareholders’ equity | ||
Preferred shares, authorized 15,000,000 shares, $.01 par: | 150,000 | 150,000 |
5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 399,896 shares issued and outstanding | ||
Shareholders’ equity | ||
Preferred shares, authorized 15,000,000 shares, $.01 par: | $ 9,997 | $ 9,997 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Operating real estate, consolidated variable interest entities | $ 1,703,069 | $ 1,703,069 | $ 1,701,804 |
Construction-in-progress, consolidated variable interest entities | 78,633 | 78,633 | 51,313 |
Accumulated depreciation and amortization, consolidated variable interest entities | 312,416 | 312,416 | 292,374 |
Mortgages payable, consolidated variable interest entities | $ 441,469 | $ 441,469 | $ 444,388 |
Preferred shares, authorized | 15,000,000 | 15,000,000 | 15,000,000 |
Preferred shares, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Common shares of beneficial interest, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Common shares of beneficial interest, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common shares of beneficial interest, shares issued | 74,950,197 | 74,950,197 | 74,249,633 |
Common shares of beneficial interest, shares outstanding | 74,950,197 | 74,950,197 | 74,249,633 |
5.417% Series 1 Cumulative Convertible Preferred | |||
Preferred shares, percentage | 5.417% | 5.417% | 5.417% |
Preferred shares, liquidation preference | $ 25 | $ 25 | $ 25 |
Preferred shares, shares issued | 399,896 | 399,896 | 399,896 |
Preferred shares, shares outstanding | 399,896 | 399,896 | 399,896 |
5.0% Series C Cumulative Redeemable Preferred | |||
Preferred shares, percentage | 5.00% | 5.00% | |
Preferred shares, liquidation preference | $ 25,000 | $ 25,000 | $ 25,000 |
Preferred shares, shares issued | 6,000 | 6,000 | 6,000 |
Preferred shares, shares outstanding | 6,000 | 6,000 | 6,000 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
REVENUE | ||||
Rental income | $ 229,731 | $ 224,168 | $ 461,223 | $ 448,816 |
Mortgage interest income | 734 | 734 | 1,469 | 1,491 |
Total revenue | 230,465 | 224,902 | 462,692 | 450,307 |
EXPENSES | ||||
Rental expenses | 41,438 | 39,905 | 85,698 | 84,678 |
Real estate taxes | 25,166 | 28,307 | 52,853 | 56,755 |
General and administrative | 11,422 | 8,413 | 20,987 | 16,342 |
Depreciation and amortization | 59,057 | 58,381 | 118,679 | 116,491 |
Total operating expenses | 137,083 | 135,006 | 278,217 | 274,266 |
Gain on sale of real estate, net of tax | 16,197 | 3,972 | 16,197 | 7,288 |
OPERATING INCOME | 109,579 | 93,868 | 200,672 | 183,329 |
OTHER INCOME/(EXPENSE) | ||||
Other interest income | 189 | 159 | 366 | 338 |
Interest expense | (27,482) | (27,766) | (55,515) | (53,950) |
Income (loss) from partnerships | 381 | (728) | (1,053) | (1,253) |
NET INCOME | 82,667 | 65,533 | 144,470 | 128,464 |
Net income attributable to noncontrolling interests | (1,765) | (1,938) | (3,424) | (3,622) |
NET INCOME ATTRIBUTABLE TO THE TRUST | 80,902 | 63,595 | 141,046 | 124,842 |
Dividends on preferred shares | (2,011) | (2,011) | (4,021) | (4,021) |
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS | $ 78,891 | $ 61,584 | $ 137,025 | $ 120,821 |
EARNINGS PER COMMON SHARE, BASIC: | ||||
Net income available for common shareholders | $ 1.05 | $ 0.84 | $ 1.83 | $ 1.65 |
Weighted average number of common shares | 74,713 | 72,990 | 74,458 | 72,948 |
EARNINGS PER COMMON SHARE, DILUTED: | ||||
Net income available for common shareholders | $ 1.05 | $ 0.84 | $ 1.83 | $ 1.65 |
Weighted average number of common shares | 74,713 | 73,025 | 74,458 | 72,997 |
COMPREHENSIVE INCOME | $ 82,268 | $ 65,456 | $ 143,862 | $ 128,854 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE TRUST | $ 80,503 | $ 63,518 | $ 140,438 | $ 125,232 |
Consolidated Statement Of Share
Consolidated Statement Of Shareholders' Equity - USD ($) $ in Thousands | Total | Preferred Shares | Common Shares | Additional Paid-in Capital | Accumulated Dividends in Excess of Net Income | Accumulated Other Comprehensive (Loss) Income | Noncontrolling Interests | Common SharesAdditional Paid-in Capital |
Beginning balance (in shares) at Dec. 31, 2017 | 405,896 | 73,090,877 | ||||||
Beginning balance at Dec. 31, 2017 | $ 2,391,514 | $ 159,997 | $ 733 | $ 2,855,321 | $ (749,367) | $ 22 | $ 124,808 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
January 1 adoption of new accounting standard - See Note 2 | (6,028) | (6,028) | ||||||
Net income, excluding amounts attributable to redeemable noncontrolling interests | 126,466 | 124,842 | 1,624 | |||||
Other comprehensive (loss) income - change in fair value of interest rate swaps | 390 | 390 | ||||||
Dividends declared to common shareholders | (146,399) | (146,399) | ||||||
Dividends declared to preferred shareholders | (4,021) | (4,021) | ||||||
Distributions declared to noncontrolling interests | (2,767) | (2,767) | ||||||
Shares issued (in shares) | 148,614 | |||||||
Shares issued | 18,320 | $ 2 | $ 18,318 | |||||
Exercise of stock options (in shares) | 93,593 | |||||||
Exercise of stock options | 4,041 | $ 1 | 4,040 | |||||
Shares issued under dividend reinvestment plan (in shares) | 9,292 | |||||||
Shares issued under dividend reinvestment plan | 1,086 | 1,086 | ||||||
Share-based compensation expense, net of forfeitures (in shares) | 99,574 | |||||||
Share-based compensation expense, net of forfeitures | 7,144 | $ 1 | 7,143 | |||||
Shares withheld for employee taxes (in shares) | (7,007) | |||||||
Shares withheld for employee taxes | (777) | (777) | ||||||
Conversion and redemption of OP units (in Shares) | 0 | |||||||
Conversion and redemption of OP units | (4,386) | $ 0 | (360) | (4,026) | ||||
Contributions from noncontrolling interests | 3,009 | 3,009 | ||||||
Ending balance (in shares) at Jun. 30, 2018 | 405,896 | 73,434,943 | ||||||
Ending balance at Jun. 30, 2018 | 2,387,592 | $ 159,997 | $ 737 | 2,884,771 | (780,973) | 412 | 122,648 | |
Beginning balance (in shares) at Mar. 31, 2018 | 405,896 | 73,216,520 | ||||||
Beginning balance at Mar. 31, 2018 | 2,373,110 | $ 159,997 | $ 735 | 2,859,717 | (769,311) | 489 | 121,483 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income, excluding amounts attributable to redeemable noncontrolling interests | 64,550 | 63,595 | 955 | |||||
Other comprehensive (loss) income - change in fair value of interest rate swaps | (77) | (77) | ||||||
Dividends declared to common shareholders | (73,246) | (73,246) | ||||||
Dividends declared to preferred shareholders | (2,011) | (2,011) | ||||||
Distributions declared to noncontrolling interests | (1,419) | (1,419) | ||||||
Shares issued (in shares) | 148,584 | |||||||
Shares issued | 18,316 | $ 2 | 18,314 | |||||
Exercise of stock options (in shares) | 63,593 | |||||||
Exercise of stock options | 2,779 | 2,779 | ||||||
Shares issued under dividend reinvestment plan (in shares) | 4,852 | |||||||
Shares issued under dividend reinvestment plan | 539 | 539 | ||||||
Share-based compensation expense, net of forfeitures (in shares) | 1,606 | |||||||
Share-based compensation expense, net of forfeitures | 3,274 | $ 0 | 3,274 | |||||
Shares withheld for employee taxes (in shares) | (212) | |||||||
Shares withheld for employee taxes | (24) | (24) | ||||||
Conversion and redemption of OP units (in Shares) | 0 | |||||||
Conversion and redemption of OP units | (1,208) | $ 0 | 172 | (1,380) | ||||
Contributions from noncontrolling interests | 3,009 | 3,009 | ||||||
Ending balance (in shares) at Jun. 30, 2018 | 405,896 | 73,434,943 | ||||||
Ending balance at Jun. 30, 2018 | 2,387,592 | $ 159,997 | $ 737 | 2,884,771 | (780,973) | 412 | 122,648 | |
Beginning balance (in shares) at Dec. 31, 2018 | 405,896 | 74,249,633 | ||||||
Beginning balance at Dec. 31, 2018 | 2,467,330 | $ 159,997 | $ 745 | 3,004,442 | (818,877) | (416) | 121,439 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
January 1 adoption of new accounting standard - See Note 2 | (7,098) | (7,098) | ||||||
Net income, excluding amounts attributable to redeemable noncontrolling interests | 142,687 | 141,046 | 1,641 | |||||
Other comprehensive (loss) income - change in fair value of interest rate swaps | (608) | (608) | ||||||
Dividends declared to common shareholders | (152,555) | (152,555) | ||||||
Dividends declared to preferred shareholders | (4,021) | (4,021) | ||||||
Distributions declared to noncontrolling interests | (7,664) | (7,664) | ||||||
Shares issued (in shares) | 511,954 | |||||||
Shares issued | 68,304 | $ 5 | 68,299 | |||||
Shares issued under dividend reinvestment plan (in shares) | 8,121 | |||||||
Shares issued under dividend reinvestment plan | 1,054 | 1,054 | ||||||
Share-based compensation expense, net of forfeitures (in shares) | 102,137 | |||||||
Share-based compensation expense, net of forfeitures | 6,992 | $ 1 | 6,991 | |||||
Shares withheld for employee taxes (in shares) | (32,900) | |||||||
Shares withheld for employee taxes | (4,442) | (4,442) | ||||||
Conversion and redemption of OP units (in Shares) | 111,252 | |||||||
Conversion and redemption of OP units | 0 | $ 1 | 11,935 | (11,936) | ||||
Adjustment to redeemable noncontrolling interests | 667 | 667 | ||||||
Ending balance (in shares) at Jun. 30, 2019 | 405,896 | 74,950,197 | ||||||
Ending balance at Jun. 30, 2019 | 2,510,646 | $ 159,997 | $ 752 | 3,088,946 | (841,505) | (1,024) | 103,480 | |
Beginning balance (in shares) at Mar. 31, 2019 | 405,896 | 74,836,984 | ||||||
Beginning balance at Mar. 31, 2019 | 2,501,563 | $ 159,997 | $ 752 | 3,071,981 | (843,947) | (625) | 113,405 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income, excluding amounts attributable to redeemable noncontrolling interests | 81,760 | 80,902 | 858 | |||||
Other comprehensive (loss) income - change in fair value of interest rate swaps | (399) | (399) | ||||||
Dividends declared to common shareholders | (76,449) | (76,449) | ||||||
Dividends declared to preferred shareholders | (2,011) | 2,011 | ||||||
Distributions declared to noncontrolling interests | (6,398) | 6,398 | ||||||
Shares issued (in shares) | 65,822 | |||||||
Shares issued | 8,951 | $ 0 | $ 8,951 | |||||
Shares issued under dividend reinvestment plan (in shares) | 3,848 | |||||||
Shares issued under dividend reinvestment plan | 526 | 526 | ||||||
Share-based compensation expense, net of forfeitures (in shares) | 1,551 | |||||||
Share-based compensation expense, net of forfeitures | 3,131 | 3,131 | ||||||
Shares withheld for employee taxes (in shares) | (214) | |||||||
Shares withheld for employee taxes | (28) | (28) | ||||||
Conversion and redemption of OP units (in Shares) | 42,206 | |||||||
Conversion and redemption of OP units | 0 | 4,385 | (4,385) | |||||
Ending balance (in shares) at Jun. 30, 2019 | 405,896 | 74,950,197 | ||||||
Ending balance at Jun. 30, 2019 | $ 2,510,646 | $ 159,997 | $ 752 | $ 3,088,946 | $ (841,505) | $ (1,024) | $ 103,480 |
Consolidated Statement Of Sha_2
Consolidated Statement Of Shareholders' Equity (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Net income attributable to redeemable noncontrolling interests | $ 907 | $ 983 | $ 1,783 | $ 1,998 |
Dividends declared to common shareholders (in dollars per share) | $ 1.02 | $ 1 | $ 2.04 | $ 2 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING ACTIVITIES | ||
Net income | $ 144,470 | $ 128,464 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 118,679 | 116,491 |
Gain on sale of real estate, net | (16,197) | (7,288) |
Loss from partnerships | 1,053 | 1,253 |
Other, net | 2,138 | 2,825 |
Changes in assets and liabilities, net of effects of acquisitions and dispositions: | ||
Proceeds from new market tax credit transaction, net of deferred costs | 0 | 12,353 |
Increase in accounts receivable, net | (5,325) | (3,805) |
Decrease in prepaid expenses and other assets | 7,800 | 10,077 |
Decrease in accounts payable and accrued expenses | (1,493) | (1,286) |
(Decrease) increase in security deposits and other liabilities | (8,838) | 4,027 |
Net cash provided by operating activities | 242,287 | 263,111 |
INVESTING ACTIVITIES | ||
Acquisition of real estate | (25,176) | (1,736) |
Capital expenditures - development and redevelopment | (133,570) | (150,119) |
Capital expenditures - other | (36,669) | (35,654) |
Proceeds from sale of real estate | 93,025 | 121,391 |
Investment in partnerships | (907) | (120) |
Distribution from partnerships in excess of earnings | 1,301 | 205 |
Leasing costs | (11,473) | (12,339) |
Repayment (issuance) of mortgage and other notes receivable, net | 101 | (323) |
Net cash used in investing activities | (113,368) | (78,695) |
FINANCING ACTIVITIES | ||
Net borrowings under revolving credit facility, net of costs | 0 | 48,000 |
Issuance of senior notes, net of costs | 297,076 | 0 |
Repayment of mortgages, finance leases and notes payable | (298,100) | (13,408) |
Issuance of common shares, net of costs | 68,461 | 22,492 |
Dividends paid to common and preferred shareholders | (154,965) | (149,603) |
Shares withheld for employee taxes | (4,442) | (777) |
Contributions from noncontrolling interests | 161 | 1,728 |
Distributions to and redemptions of noncontrolling interests | (5,173) | (9,086) |
Net cash used in financing activities | (96,982) | (100,654) |
Increase in cash, cash equivalents and restricted cash | 31,937 | 83,762 |
Cash, cash equivalents, and restricted cash at beginning of year | 108,332 | 25,200 |
Cash, cash equivalents, and restricted cash at end of period | $ 140,269 | $ 108,962 |
Business And Organization
Business And Organization | 6 Months Ended |
Jun. 30, 2019 | |
Nature Of Operations [Abstract] | |
BUSINESS AND ORGANIZATION | BUSINESS AND ORGANIZATION Federal Realty Investment Trust (the “Trust”) is an equity real estate investment trust (“REIT”) specializing in the ownership, management, and redevelopment of retail and mixed-use properties. Our properties are located primarily in densely populated and affluent communities in strategically selected metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, California, and South Florida. As of June 30, 2019 , we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 104 predominantly retail real estate projects. We operate in a manner intended to enable us to qualify as a REIT for federal income tax purposes. A REIT that distributes at least 90% of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. Therefore, federal income taxes on our taxable income have been and are generally expected to be immaterial. We are obligated to pay state taxes, generally consisting of franchise or gross receipts taxes in certain states. Such state taxes also have not been material. |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying consolidated balance sheet as of December 31, 2018 , which has been derived from audited financial statements, and unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Trust’s latest Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation for the periods presented have been included. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the full year. Certain 2018 amounts have been reclassified to conform to current period presentation, which includes the presentation of rental income on our Consolidated Statements of Comprehensive Income. Principles of Consolidation Our consolidated financial statements include the accounts of the Trust, its corporate subsidiaries, and all entities in which the Trust has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity (“VIE”). The equity interests of other investors are reflected as noncontrolling interests or redeemable noncontrolling interests. All significant intercompany transactions and balances are eliminated in consolidation. We account for our interests in joint ventures, which we do not control, using the equity method of accounting. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP,” requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates. Recently Adopted Accounting Pronouncements Standard Description Effect on the financial statements or significant matters Adopted on January 1, 2019: Leases (Topic 842) and related updates: Topic 842, Leases ASU 2019-01, March 2019, Leases (Topic 842), Codification Improvements ASC 842 significantly changes the accounting for leases by requiring lessees to recognize assets and liabilities for leases greater than 12 months on their balance sheet. The larger changes to the lessor model include: a change in the definition of initial direct costs of leases (resulting in the upfront expensing of more leasing related costs), the requirement to make an upfront and ongoing assessment of whether collection of substantially all of the lease payments required for the term of each lease is probable (if not probable, lease revenue is effectively recognized when cash is collected), certain presentation changes, and the elimination of real estate specific guidance. ASU 2018-10 and ASU 2019-01 provide narrow amendments that clarify how to apply certain aspects of the guidance in ASU 2016-02. ASU 2018-11 provides the option of an additional transition method, by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. It also provides lessors an option to not separate lease and non-lease components when certain criteria are met. We have elected to apply the transition provisions of ASC Topic 842 at the beginning of the period of adoption (i.e., January 1, 2019), and therefore, did not retrospectively adjust prior periods presented. We have also elected to apply certain adoption related practical expedients for all leases that commenced prior to the effective date. These practical expedients include not reassessing whether any expired or existing contracts are or contain leases; not reassessing the lease classification for any expired or existing leases; and not reassessing initial direct costs for any existing leases. We have also elected the practical expedient allowing lessors to combine non-lease and lease components (primarily impacts common area maintenance recoveries). From a lessee perspective, the primary impact of adoption on January 1, 2019 was to record a lease obligation liability and right of use asset for operating leases where we are the lessee. The most significant of these operating leases are ground leases at 14 properties. The operating lease right of use assets and related liabilities are shown separately on the face of our consolidated balance sheet. Additionally, amounts previously recorded as capital lease assets and included in real estate have been reclassified in the June 30, 2019 balance sheet as finance lease right of use assets and the related capital lease obligations have been reclassified in the June 30, 2019 balance sheet as finance lease liabilities. Income statement presentation is not impacted for our existing operating and finance leases. From a lessor perspective, adoption of ASC 842 results in a charge to opening accumulated dividends in excess of net income of $7.1 million. This charge is attributable to the write off of certain direct leasing costs recorded as of December 31, 2018 under the previous lease accounting rules for leases which had not commenced and the write off of December 31, 2018 unreserved receivables (including straight-line receivables) for leases where we have determined that the collection of substantially all of the lease payments required for the term of the lease is not probable. Income statement presentation changes incorporated into our June 30, 2019 financial statements include: no longer recording a gross up of revenue and expense for costs (such as real estate taxes) paid directly by lessees on our behalf and recording collectability adjustments against revenue rather than as bad debt within rental expenses. As a result of the change in the definition of initial direct costs of leases, capitalized leasing costs excluding external commissions decreased to $0.6 million and $1.0 million for the three and six months ended June 30, 2019, respectively, from$2.0 million and $3.6 million for the three and six months ended June 30, 2018, respectively. The following table provides additional information on our operating and finance leases where we are the lessee: Three Months Ended Six Months Ended June 30, 2019 (In thousands) LEASE COST: Finance lease cost: Amortization of right-of-use assets $ 321 $ 642 Interest on lease liabilities 1,455 2,911 Operating lease cost 1,493 2,997 Variable lease cost 129 220 Total lease cost $ 3,398 $ 6,770 OTHER INFORMATION: Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for finance leases $ 1,433 $ 2,893 Operating cash flows for operating leases $ 1,268 $ 2,779 Financing cash flows for finance leases $ 16 $ 41 June 30, 2019 Weighted-average remaining lease term - finance leases 18.6 years Weighted-average remaining lease term - operating leases 53.7 years Weighted-average discount rate - finance leases 8.0 % Weighted-average discount rate - operating leases 4.5 % Consolidated Statements of Cash Flows—Supplemental Disclosures The following tables provide supplemental disclosures related to the Consolidated Statements of Cash Flows: Six Months Ended June 30, 2019 2018 (In thousands) SUPPLEMENTAL DISCLOSURES: Total interest costs incurred $ 64,755 $ 64,685 Interest capitalized (9,240 ) (10,735 ) Interest expense $ 55,515 $ 53,950 Cash paid for interest, net of amounts capitalized $ 53,588 $ 52,997 Cash paid for income taxes $ 419 $ 692 NON-CASH INVESTING AND FINANCING TRANSACTIONS: DownREIT operating partnership units redeemed for common shares $ 11,935 $ — Shares issued under dividend reinvestment plan $ 897 $ 955 See additional disclosures in the "Recently Adopted Accounting Pronouncements" section of this footnote relating to operating lease right of use assets and lease liabilities recorded in connection with our adoption of ASC Topic 842. June 30, December 31, 2019 2018 (In thousands) RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: Cash and cash equivalents $ 105,903 $ 64,087 Restricted cash (1) 34,366 44,245 Total cash, cash equivalents, and restricted cash $ 140,269 $ 108,332 (1) Restricted cash balances are included in "prepaid expenses and other assets" on our consolidated balance sheets. |
Real Estate
Real Estate | 6 Months Ended |
Jun. 30, 2019 | |
Real Estate [Abstract] | |
REAL ESTATE | REAL ESTATE On February 8, 2019 , we acquired the fee interest in Fairfax Junction, a 75,000 square foot shopping center in Fairfax, Virginia for $22.5 million . Approximately $0.6 million and $0.4 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively. On May 28, 2019 , we sold Free State Shopping Center in Bowie, Maryland for a sales price of $72.0 million , and on May 29, 2019 , we sold a land parcel at Northeast Shopping Center in Philadelphia, Pennsylvania for $7.7 million . These sales resulted in a gain of $15.2 million . During the six months ended June 30, 2019 , we closed on the sale of 27 condominium units at our Assembly Row and Pike & Rose properties (combined), received proceeds net of closing costs of $13.1 million , and recognized a gain of $0.7 million , net of $0.2 million of income taxes. The cost basis for the remaining condominium units as of June 30, 2019 is $5.9 million , and is included in "assets held for sale" on our consolidated balance sheets. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Instruments [Abstract] | |
DEBT | DEBT On January 31, 2019 , we repaid the $20.3 million mortgage loan on Rollingwood Apartments, at par, prior to its original maturity date. On June 7, 2019 , we issued $300.0 million of fixed rate senior unsecured notes that mature on June 15, 2029 and bear interest at 3.20% . The notes were offered at 99.838% of the principal amount with a yield to maturity of 3.219% . The net proceeds from this note offering after issuance discounts, underwriting fees, and other costs were $297.0 million , which were primarily used to repay our $275.0 million unsecured term loan, at par, on June 7, 2019 . During the three and six months ended June 30, 2019 , the maximum amount of borrowings outstanding under our $800.0 million revolving credit facility was $81.0 million and $116.5 million , respectively, and the weighted average interest rate, before amortization of debt fees, was 3.2% for both periods. During the three and six months ended June 30, 2019 , the weighted average borrowings outstanding were $27.1 million and $45.1 million , respectively. At June 30, 2019 , our revolving credit facility had no balance outstanding. Our revolving credit facility and certain notes require us to comply with various financial covenants, including the maintenance of minimum shareholders' equity and debt coverage ratios and a maximum ratio of debt to net worth. As of June 30, 2019 , we were in compliance with all default related debt covenants. |
Fair Value Of Financial Instrum
Fair Value Of Financial Instruments | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Except as disclosed below, the carrying amount of our financial instruments approximates their fair value. The fair value of our mortgages payable, notes payable and senior notes and debentures is sensitive to fluctuations in interest rates. Quoted market prices (Level 1) were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis (Level 2) is generally used to estimate the fair value of our mortgages and notes payable. Considerable judgment is necessary to estimate the fair value of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the carrying amount and fair value of our mortgages payable, notes payable and senior notes and debentures is as follows: June 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value (In thousands) Mortgages and notes payable $ 455,046 $ 460,416 $ 753,406 $ 751,361 Senior notes and debentures $ 2,702,737 $ 2,830,445 $ 2,404,279 $ 2,371,392 One of our equity method investees has two interest rate swaps which qualify for cash flow hedge accounting. For the three and six months ended June 30, 2019 , our share of the change in fair value of the related swaps included in "accumulated other comprehensive loss" was $0.4 million , and $0.6 million |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES We are sometimes involved in lawsuits, warranty claims, and environmental matters arising in the ordinary course of business. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters. We are currently a party to various legal proceedings. We accrue a liability for litigation if an unfavorable outcome is probable and the amount of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, we accrue the best estimate within the range; however, if no amount within the range is a better estimate than any other amount, the minimum within the range is accrued. Legal fees related to litigation are expensed as incurred. We do not believe that the ultimate outcome of these matters, either individually or in the aggregate, could have a material adverse effect on our financial position or overall trends in results of operations; however, litigation is subject to inherent uncertainties. Also under our leases, tenants are typically obligated to indemnify us from and against all liabilities, costs and expenses imposed upon or asserted against us (1) as owner of the properties due to certain matters relating to the operation of the properties by the tenant, and (2) where appropriate, due to certain matters relating to the ownership of the properties prior to their acquisition by us. Under the terms of certain partnership agreements, the partners have the right to exchange their operating partnership units for cash or common shares, at our option. A total of 627,171 downREIT operating partnership units are outstanding which have a total fair value of approximately $80.8 million , which is calculated by multiplying the outstanding number of downREIT partnership units by our closing stock price on June 30, 2019 . |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS’ EQUITY | SHAREHOLDERS’ EQUITY The following table provides a summary of dividends declared and paid per share: Six Months Ended June 30, 2019 2018 Declared Paid Declared Paid Common shares $ 2.040 $ 2.040 $ 2.000 $ 2.000 5.417% Series 1 Cumulative Convertible Preferred shares $ 0.677 $ 0.677 $ 0.677 $ 0.677 5.0% Series C Cumulative Redeemable Preferred shares (1) $ 0.625 $ 0.625 $ 0.625 $ 0.681 (1) Amount represents dividends per depository share, each representing 1/1000th of a share. We have an at-the-market (“ATM”) equity program in which we may from time to time offer and sell common shares having an aggregate offering price of up to $400.0 million . We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay amounts outstanding under our revolving credit facility and/or for general corporate purposes. For the six months ended June 30, 2019 , we sold 511,938 common shares at a weighted average price per share of $134.96 for net cash proceeds of $68.3 million and paid $0.7 million in commissions and $0.1 million in additional offering expenses related to the sales of these common shares. As of June 30, 2019 , we had the capacity to issue up to $203.4 million in common shares under our ATM equity program. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION PLANS | SHARE-BASED COMPENSATION PLANS A summary of share-based compensation expense included in net income is as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 (In thousands) Grants of common shares and options $ 3,131 $ 3,274 $ 6,992 $ 7,144 Capitalized share-based compensation (201 ) (488 ) (472 ) (926 ) Share-based compensation expense $ 2,930 $ 2,786 $ 6,520 $ 6,218 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE We have calculated earnings per share (“EPS”) under the two-class method. The two-class method is an earnings allocation methodology whereby EPS for each class of common stock and participating securities is calculated according to dividends declared and participation rights in undistributed earnings. For the three and six months ended June 30, 2019 , we had 0.2 million weighted average unvested shares outstanding and for the three and six months ended June 30, 2018 we had 0.3 million weighted average unvested shares outstanding, which are considered participating securities. Therefore, we have allocated our earnings for basic and diluted EPS between common shares and unvested shares; the portion of earnings allocated to the unvested shares is reflected as “earnings allocated to unvested shares” in the reconciliation below. In the dilutive EPS calculation, dilutive stock options were calculated using the treasury stock method consistent with prior periods. There were 682 anti-dilutive stock options for the three and six months ended June 30, 2019 and 2018 . The conversions of downREIT operating partnership units and 5.417% Series 1 Cumulative Convertible Preferred Shares are anti-dilutive for all periods presented and accordingly, have been excluded from the weighted average common shares used to compute diluted EPS. Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 (In thousands, except per share data) NUMERATOR Net income $ 82,667 $ 65,533 $ 144,470 $ 128,464 Less: Preferred share dividends (2,011 ) (2,011 ) (4,021 ) (4,021 ) Less: Income from operations attributable to noncontrolling interests (1,765 ) (1,938 ) (3,424 ) (3,622 ) Less: Earnings allocated to unvested shares (226 ) (255 ) (439 ) (508 ) Net income available for common shareholders, basic and diluted $ 78,665 $ 61,329 $ 136,586 $ 120,313 DENOMINATOR Weighted average common shares outstanding—basic 74,713 72,990 74,458 72,948 Stock options — 35 — 49 Weighted average common shares outstanding—diluted 74,713 73,025 74,458 72,997 EARNINGS PER COMMON SHARE, BASIC: Net income available for common shareholders $ 1.05 $ 0.84 $ 1.83 $ 1.65 EARNINGS PER COMMON SHARE, DILUTED: Net income available for common shareholders $ 1.05 $ 0.84 $ 1.83 $ 1.65 |
Subsequent Event Subsequent Eve
Subsequent Event Subsequent Event | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT On July 25, 2019 , we amended our revolving credit facility to increase our borrowing capacity to $1.0 billion and extend the maturity date to January 19, 2024, subject to two six-month extensions at our option. Under the amended facility, the spread over LIBOR is 77.5 basis points based on our current credit rating. In addition, we have an option (subject to bank approval) to increase the credit facility through an accordion feature to $1.5 billion . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policy) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The accompanying consolidated balance sheet as of December 31, 2018 , which has been derived from audited financial statements, and unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Trust’s latest Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation for the periods presented have been included. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the full year. Certain 2018 amounts have been reclassified to conform to current period presentation, which includes the presentation of rental income on our Consolidated Statements of Comprehensive Income. |
Principles of Consolidation | Principles of Consolidation Our consolidated financial statements include the accounts of the Trust, its corporate subsidiaries, and all entities in which the Trust has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity (“VIE”). The equity interests of other investors are reflected as noncontrolling interests or redeemable noncontrolling interests. All significant intercompany transactions and balances are eliminated in consolidation. We account for our interests in joint ventures, which we do not control, using the equity method of accounting. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP,” requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Standard Description Effect on the financial statements or significant matters Adopted on January 1, 2019: Leases (Topic 842) and related updates: Topic 842, Leases ASU 2019-01, March 2019, Leases (Topic 842), Codification Improvements ASC 842 significantly changes the accounting for leases by requiring lessees to recognize assets and liabilities for leases greater than 12 months on their balance sheet. The larger changes to the lessor model include: a change in the definition of initial direct costs of leases (resulting in the upfront expensing of more leasing related costs), the requirement to make an upfront and ongoing assessment of whether collection of substantially all of the lease payments required for the term of each lease is probable (if not probable, lease revenue is effectively recognized when cash is collected), certain presentation changes, and the elimination of real estate specific guidance. ASU 2018-10 and ASU 2019-01 provide narrow amendments that clarify how to apply certain aspects of the guidance in ASU 2016-02. ASU 2018-11 provides the option of an additional transition method, by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. It also provides lessors an option to not separate lease and non-lease components when certain criteria are met. We have elected to apply the transition provisions of ASC Topic 842 at the beginning of the period of adoption (i.e., January 1, 2019), and therefore, did not retrospectively adjust prior periods presented. We have also elected to apply certain adoption related practical expedients for all leases that commenced prior to the effective date. These practical expedients include not reassessing whether any expired or existing contracts are or contain leases; not reassessing the lease classification for any expired or existing leases; and not reassessing initial direct costs for any existing leases. We have also elected the practical expedient allowing lessors to combine non-lease and lease components (primarily impacts common area maintenance recoveries). From a lessee perspective, the primary impact of adoption on January 1, 2019 was to record a lease obligation liability and right of use asset for operating leases where we are the lessee. The most significant of these operating leases are ground leases at 14 properties. The operating lease right of use assets and related liabilities are shown separately on the face of our consolidated balance sheet. Additionally, amounts previously recorded as capital lease assets and included in real estate have been reclassified in the June 30, 2019 balance sheet as finance lease right of use assets and the related capital lease obligations have been reclassified in the June 30, 2019 balance sheet as finance lease liabilities. Income statement presentation is not impacted for our existing operating and finance leases. From a lessor perspective, adoption of ASC 842 results in a charge to opening accumulated dividends in excess of net income of $7.1 million. This charge is attributable to the write off of certain direct leasing costs recorded as of December 31, 2018 under the previous lease accounting rules for leases which had not commenced and the write off of December 31, 2018 unreserved receivables (including straight-line receivables) for leases where we have determined that the collection of substantially all of the lease payments required for the term of the lease is not probable. Income statement presentation changes incorporated into our June 30, 2019 financial statements include: no longer recording a gross up of revenue and expense for costs (such as real estate taxes) paid directly by lessees on our behalf and recording collectability adjustments against revenue rather than as bad debt within rental expenses. As a result of the change in the definition of initial direct costs of leases, capitalized leasing costs excluding external commissions decreased to $0.6 million and $1.0 million for the three and six months ended June 30, 2019, respectively, from$2.0 million and $3.6 million for the three and six months ended June 30, 2018, respectively. |
Summary Of Significant Accoun_3
Summary Of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of lease cost | The following table provides additional information on our operating and finance leases where we are the lessee: Three Months Ended Six Months Ended June 30, 2019 (In thousands) LEASE COST: Finance lease cost: Amortization of right-of-use assets $ 321 $ 642 Interest on lease liabilities 1,455 2,911 Operating lease cost 1,493 2,997 Variable lease cost 129 220 Total lease cost $ 3,398 $ 6,770 OTHER INFORMATION: Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for finance leases $ 1,433 $ 2,893 Operating cash flows for operating leases $ 1,268 $ 2,779 Financing cash flows for finance leases $ 16 $ 41 June 30, 2019 Weighted-average remaining lease term - finance leases 18.6 years Weighted-average remaining lease term - operating leases 53.7 years Weighted-average discount rate - finance leases 8.0 % Weighted-average discount rate - operating leases 4.5 % |
Supplemental disclosures related to the Consolidated Statements Of Cash Flows | The following tables provide supplemental disclosures related to the Consolidated Statements of Cash Flows: Six Months Ended June 30, 2019 2018 (In thousands) SUPPLEMENTAL DISCLOSURES: Total interest costs incurred $ 64,755 $ 64,685 Interest capitalized (9,240 ) (10,735 ) Interest expense $ 55,515 $ 53,950 Cash paid for interest, net of amounts capitalized $ 53,588 $ 52,997 Cash paid for income taxes $ 419 $ 692 NON-CASH INVESTING AND FINANCING TRANSACTIONS: DownREIT operating partnership units redeemed for common shares $ 11,935 $ — Shares issued under dividend reinvestment plan $ 897 $ 955 |
Reconciliation of cash, cash equivalents, and restricted cash | June 30, December 31, 2019 2018 (In thousands) RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: Cash and cash equivalents $ 105,903 $ 64,087 Restricted cash (1) 34,366 44,245 Total cash, cash equivalents, and restricted cash $ 140,269 $ 108,332 (1) Restricted cash balances are included in "prepaid expenses and other assets" on our consolidated balance sheets. |
Fair Value Of Financial Instr_2
Fair Value Of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of carrying amount and fair value of financial instruments | A summary of the carrying amount and fair value of our mortgages payable, notes payable and senior notes and debentures is as follows: June 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value (In thousands) Mortgages and notes payable $ 455,046 $ 460,416 $ 753,406 $ 751,361 Senior notes and debentures $ 2,702,737 $ 2,830,445 $ 2,404,279 $ 2,371,392 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Summary of dividends declared and paid per share | The following table provides a summary of dividends declared and paid per share: Six Months Ended June 30, 2019 2018 Declared Paid Declared Paid Common shares $ 2.040 $ 2.040 $ 2.000 $ 2.000 5.417% Series 1 Cumulative Convertible Preferred shares $ 0.677 $ 0.677 $ 0.677 $ 0.677 5.0% Series C Cumulative Redeemable Preferred shares (1) $ 0.625 $ 0.625 $ 0.625 $ 0.681 (1) Amount represents dividends per depository share, each representing 1/1000th of a share. |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of share-based compensation expense included in net income | A summary of share-based compensation expense included in net income is as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 (In thousands) Grants of common shares and options $ 3,131 $ 3,274 $ 6,992 $ 7,144 Capitalized share-based compensation (201 ) (488 ) (472 ) (926 ) Share-based compensation expense $ 2,930 $ 2,786 $ 6,520 $ 6,218 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | In the dilutive EPS calculation, dilutive stock options were calculated using the treasury stock method consistent with prior periods. There were 682 anti-dilutive stock options for the three and six months ended June 30, 2019 and 2018 . The conversions of downREIT operating partnership units and 5.417% Series 1 Cumulative Convertible Preferred Shares are anti-dilutive for all periods presented and accordingly, have been excluded from the weighted average common shares used to compute diluted EPS. Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 (In thousands, except per share data) NUMERATOR Net income $ 82,667 $ 65,533 $ 144,470 $ 128,464 Less: Preferred share dividends (2,011 ) (2,011 ) (4,021 ) (4,021 ) Less: Income from operations attributable to noncontrolling interests (1,765 ) (1,938 ) (3,424 ) (3,622 ) Less: Earnings allocated to unvested shares (226 ) (255 ) (439 ) (508 ) Net income available for common shareholders, basic and diluted $ 78,665 $ 61,329 $ 136,586 $ 120,313 DENOMINATOR Weighted average common shares outstanding—basic 74,713 72,990 74,458 72,948 Stock options — 35 — 49 Weighted average common shares outstanding—diluted 74,713 73,025 74,458 72,997 EARNINGS PER COMMON SHARE, BASIC: Net income available for common shareholders $ 1.05 $ 0.84 $ 1.83 $ 1.65 EARNINGS PER COMMON SHARE, DILUTED: Net income available for common shareholders $ 1.05 $ 0.84 $ 1.83 $ 1.65 |
Business And Organization (Deta
Business And Organization (Details) | 6 Months Ended |
Jun. 30, 2019project | |
Nature Of Operations [Abstract] | |
Number of real estate properties | 104 |
Minimum percentage of taxable income distributed to shareholders | 90.00% |
Summary Of Significant Accoun_4
Summary Of Significant Accounting Policies Recently Adopted Accounting Pronouncements (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($)property | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)property | Jun. 30, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Number of properties subject to ground leases | property | 14 | 14 | ||
Cumulative impact to accumulated dividends in excess of net income | $ (7,098) | $ (6,028) | ||
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Capitalized initial direct costs of leases excluding external leasing commissions | $ 600 | $ 1,800 | 1,000 | 3,200 |
Accumulated Dividends in Excess of Net Income | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative impact to accumulated dividends in excess of net income | (7,098) | $ (6,028) | ||
Accumulated Dividends in Excess of Net Income | Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative impact to accumulated dividends in excess of net income | $ (7,100) |
Summary Of Significant Accoun_5
Summary Of Significant Accounting Policies Lease Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
LEASE COST: | ||
Amortization of right-of-use assets - finance leases | $ 321 | $ 642 |
Interest on lease liabilities - finance leases | 1,455 | 2,911 |
Operating lease cost | 1,493 | 2,997 |
Variable lease cost | 129 | 220 |
Total lease cost | 3,398 | 6,770 |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows for finance leases | 1,433 | 2,893 |
Operating cash flows for operating leases | 1,268 | 2,779 |
Financing cash flows for finance leases | $ 16 | $ 41 |
Weighted-average remaining lease term - finance leases | 18 years 7 months 6 days | 18 years 7 months 6 days |
Weighted-average remaining lease term - operating leases | 53 years 8 months 12 days | 53 years 8 months 12 days |
Weighted-average discount rate - finance leases | 8.00% | 8.00% |
Weighted-average discount rate - operating leases | 4.50% | 4.50% |
Summary Of Significant Accoun_6
Summary Of Significant Accounting Policies Consolidated Statement of Cash Flows - Supplemental Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Total interest costs incurred | $ 64,755 | $ 64,685 | ||
Interest capitalized | (9,240) | (10,735) | ||
Interest expense | $ 27,482 | $ 27,766 | 55,515 | 53,950 |
Cash paid for interest, net of amounts capitalized | 53,588 | 52,997 | ||
Cash paid for income taxes | 419 | 692 | ||
DownREIT operating partnership units redeemed for common shares | 11,935 | 0 | ||
Shares issued under dividend reinvestment plan | $ 897 | $ 955 |
Summary Of Significant Accoun_7
Summary Of Significant Accounting Policies Consolidated Statement of Cash Flows - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |||||
Cash and cash equivalents | $ 105,903 | $ 64,087 | |||
Restricted cash | [1] | 34,366 | 44,245 | ||
Total cash, cash equivalents, and restricted cash | $ 140,269 | $ 108,332 | $ 108,962 | $ 25,200 | |
[1] | (1) Restricted cash balances are included in "prepaid expenses and other assets" on our consolidated balance sheets. |
Real Estate (Significant Acquis
Real Estate (Significant Acquisition and Dispositions) (Details) $ in Thousands | May 29, 2019USD ($) | May 28, 2019USD ($) | Feb. 08, 2019USD ($)ft² | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)condominiums | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Significant Acquisition and Dispositions | ||||||||
Gain on sale of real estate, net of income tax | $ 16,197 | $ 3,972 | $ 16,197 | $ 7,288 | ||||
Assets held for sale | 5,938 | 5,938 | $ 16,576 | |||||
Fairfax Junction | ||||||||
Significant Acquisition and Dispositions | ||||||||
Square footage of real estate property | ft² | 75,000 | |||||||
Purchase price of real estate acquisition | $ 22,500 | |||||||
Free State Shopping Center | ||||||||
Significant Acquisition and Dispositions | ||||||||
Proceeds from sale | $ 72,000 | |||||||
A land parcel at Northeast shopping center | ||||||||
Significant Acquisition and Dispositions | ||||||||
Proceeds from sale | $ 7,700 | |||||||
Free State Shopping Center and a land parcel at Northeast | ||||||||
Significant Acquisition and Dispositions | ||||||||
Gain on sale | 15,200 | |||||||
Other Liabilities | Fairfax Junction | ||||||||
Significant Acquisition and Dispositions | ||||||||
Below market leases | 400 | |||||||
Amortization of above market leases | Other Assets | Fairfax Junction | ||||||||
Significant Acquisition and Dispositions | ||||||||
Above market leases | $ 600 | |||||||
Condominiums | Assembly Row and Pike & Rose | ||||||||
Significant Acquisition and Dispositions | ||||||||
Proceeds from sale | $ 13,100 | |||||||
Number of condominium units sold | condominiums | 27 | |||||||
Gain on sale of real estate, net of income tax | $ 700 | |||||||
Taxes related to the sale of condominiums | 200 | |||||||
Assets held for sale | $ 5,900 | $ 5,900 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Jun. 07, 2019 | Jan. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||||
Senior notes issued | $ 2,702,737 | $ 2,702,737 | $ 2,404,279 | |||
Net proceeds from senior note offering | 297,076 | $ 0 | ||||
Maximum borrowing capacity under revolving credit facility | 800,000 | 800,000 | ||||
Maximum amount outstanding under revolving credit facility | $ 81,000 | $ 116,500 | ||||
Weighted average interest rate, before amortization of debt fees | 3.20% | 3.20% | ||||
Weighted average borrowings outstanding | $ 27,100 | $ 45,100 | ||||
Outstanding balance on revolving credit facility | $ 0 | $ 0 | ||||
3.20% Senior note | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes issued | $ 300,000 | |||||
Mortgage loan | Rollingwood Apartments | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of mortgage loan repayment | $ 20,300 | |||||
Fixed rate senior unsecured notes | 3.20% Senior note | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 3.20% | |||||
Note offering percent | 99.838% | |||||
Debt yield to maturity rate | 3.219% | |||||
Net proceeds from senior note offering | $ 297,000 | |||||
Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Repayment of unsecured term loan | $ 275,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Summary of Carrying Value and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Mortgages payable and notes payable | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value of long-term debt | $ 455,046 | $ 753,406 |
Mortgages payable and notes payable | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value of long-term debt | 460,416 | 751,361 |
Senior notes and debentures | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value of long-term debt | 2,702,737 | 2,404,279 |
Senior notes and debentures | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value of long-term debt | $ 2,830,445 | $ 2,371,392 |
Fair Value Of Financial Instr_4
Fair Value Of Financial Instruments (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($)agreement | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)agreement | Jun. 30, 2018USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Other comprehensive loss | $ (399) | $ (77) | $ (608) | $ 390 |
Accumulated other comprehensive loss | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Other comprehensive loss | (399) | $ (77) | (608) | $ 390 |
Accumulated other comprehensive loss | One of our equity method investees | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Other comprehensive loss | $ 400 | $ 600 | ||
Fair Value, recurring | Interest rate swap | One of our equity method investees | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Number of interest rate swap agreements | agreement | 2 | 2 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 30, 2019USD ($)shares |
Commitments and Contingencies Disclosure [Abstract] | |
downREIT operating partnership units, outstanding | shares | 627,171 |
downREIT operating partnership units outstanding, fair value | $ | $ 80.8 |
Shareholders' Equity (Summary o
Shareholders' Equity (Summary of Dividends) (Details) - $ / shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | ||
Dividends | ||||||
Dividends declared to common shareholders (in dollars per share) | $ 1.02 | $ 1 | $ 2.04 | $ 2 | ||
Dividends paid per common share | $ 2.040 | $ 2 | ||||
Percentage of depository shares | 0.10% | 0.10% | 0.10% | 0.10% | ||
5.417% Series 1 Cumulative Convertible Preferred | ||||||
Dividends | ||||||
Preferred shares, percentage | 5.417% | 5.417% | 5.417% | 5.417% | 5.417% | |
Dividends declared per preferred shares | $ 0.677 | $ 0.677 | ||||
Dividends paid per preferred share | $ 0.677 | $ 0.677 | ||||
5.0% Series C Cumulative Redeemable Preferred | ||||||
Dividends | ||||||
Preferred shares, percentage | 5.00% | 5.00% | 5.00% | |||
Dividends declared per preferred shares | [1] | $ 0.625 | $ 0.625 | |||
Dividends paid per preferred share | [1] | $ 0.625 | $ 0.681 | |||
[1] | (1) Amount represents dividends per depository share, each representing 1/1000th of a share. |
Shareholders' Equity Narrative
Shareholders' Equity Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Class of Stock [Line Items] | ||
Net cash proceeds of common stock | $ 68,461 | $ 22,492 |
At The Market Equity Program | ||
Class of Stock [Line Items] | ||
Aggregate offering price of common share | $ 400,000 | |
Shares issued (in shares) | 511,938 | |
Weighted average price per common share | $ 134.96 | |
Net cash proceeds of common stock | $ 68,300 | |
Remaining capacity to issue | 203,400 | |
At The Market Equity Program | Commissions | ||
Class of Stock [Line Items] | ||
Commissions related to sales of common shares | 700 | |
At The Market Equity Program | Other offering expenses | ||
Class of Stock [Line Items] | ||
Commissions related to sales of common shares | $ 100 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Abstract] | ||||
Grants of common shares and options | $ 3,131 | $ 3,274 | $ 6,992 | $ 7,144 |
Capitalized share-based compensation | (201) | (488) | (472) | (926) |
Share-based compensation expense | $ 2,930 | $ 2,786 | $ 6,520 | $ 6,218 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Weighted average unvested shares outstanding | 200,000 | 300,000 | 200,000 | 300,000 | |
Anti-dilutive stock options | 682 | 682 | 682 | 682 | |
5.417% Series 1 Cumulative Convertible Preferred | |||||
Cumulative convertible preferred shares, dividend rate | 5.417% | 5.417% | 5.417% | 5.417% | 5.417% |
Earnings Per Share (Schedule Of
Earnings Per Share (Schedule Of Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 82,667 | $ 65,533 | $ 144,470 | $ 128,464 |
Less: Preferred share dividends | (2,011) | (2,011) | (4,021) | (4,021) |
Less: Income from operations attributable to noncontrolling interests | (1,765) | (1,938) | (3,424) | (3,622) |
Less: Earnings allocated to unvested shares | (226) | (255) | (439) | (508) |
Net income available for common shareholders, basic and diluted | $ 78,665 | $ 61,329 | $ 136,586 | $ 120,313 |
Weighted average common shares outstanding—basic | 74,713 | 72,990 | 74,458 | 72,948 |
Stock options | 0 | 35 | 0 | 49 |
Weighted average common shares outstanding—diluted | 74,713 | 73,025 | 74,458 | 72,997 |
Earnings per common share, basic | $ 1.05 | $ 0.84 | $ 1.83 | $ 1.65 |
Earnings per common share, diluted | $ 1.05 | $ 0.84 | $ 1.83 | $ 1.65 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Millions | Jul. 25, 2019 | Jun. 30, 2019 |
Subsequent Event [Line Items] | ||
Maximum borrowing capacity under revolving credit facility | $ 800 | |
Subsequent event | ||
Subsequent Event [Line Items] | ||
Maximum borrowing capacity under revolving credit facility | $ 1,000 | |
Revolving credit facility basis spread over LIBOR | 0.775% | |
Subsequent event | Option to increase credit facility through accordion feature | ||
Subsequent Event [Line Items] | ||
Maximum borrowing capacity under revolving credit facility | $ 1,500 |