Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 26, 2019 | |
Document Information [Line Items] | ||
Entity Central Index Key | 0000803649 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-9317 | |
Entity Registrant Name | EQUITY COMMONWEALTH | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 04-6558834 | |
Entity Address, Address Line One | Two North Riverside Plaza, Suite 2100 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60606 | |
City Area Code | (312) | |
Local Phone Number | 646-2800 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 121,921,801 | |
Common Shares of Beneficial Interest | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Shares of Beneficial Interest | |
Trading Symbol | EQC | |
Security Exchange Name | NYSE | |
6 1/2% Series D Cumulative Convertible Preferred Shares of Beneficial Interest | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 6 1/2% Series D Cumulative Convertible Preferred Shares of Beneficial Interest | |
Trading Symbol | EQCpD | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Real estate properties: | ||
Land | $ 85,627 | $ 135,142 |
Buildings and improvements | 571,342 | 1,004,500 |
Total real estate properties, at cost, gross | 656,969 | 1,139,642 |
Accumulated depreciation | (193,166) | (375,968) |
Total real estate properties, at cost, net | 463,803 | 763,674 |
Acquired real estate leases, net | 92 | 275 |
Cash and cash equivalents | 3,180,548 | 2,400,803 |
Marketable securities | 0 | 249,602 |
Restricted cash | 2,310 | 3,298 |
Rents receivable | 19,735 | 51,089 |
Other assets, net | 35,683 | 62,031 |
Total assets | 3,702,171 | 3,530,772 |
LIABILITIES AND EQUITY | ||
Senior unsecured debt, net | 0 | 248,473 |
Mortgage notes payable, net | 26,091 | 26,482 |
Accounts payable, accrued expenses and other | 36,903 | 62,368 |
Rent collected in advance | 3,554 | 9,451 |
Total liabilities | 66,548 | 346,774 |
Shareholders' equity: | ||
Common shares of beneficial interest, $0.01 par value: 350,000,000 shares authorized; 121,922,120 and 121,572,155 shares issued and outstanding, respectively | 1,219 | 1,216 |
Additional paid in capital | 4,308,049 | 4,305,974 |
Cumulative net income | 3,323,778 | 2,870,974 |
Cumulative other comprehensive loss | 0 | (342) |
Cumulative common distributions | (3,420,406) | (3,420,548) |
Cumulative preferred distributions | (697,730) | (693,736) |
Total shareholders’ equity | 3,634,173 | 3,182,801 |
Noncontrolling interest | 1,450 | 1,197 |
Total equity | 3,635,623 | 3,183,998 |
Total liabilities and equity | 3,702,171 | 3,530,772 |
6 1/2% Series D Cumulative Convertible Preferred Shares of Beneficial Interest | ||
Shareholders' equity: | ||
Series D preferred shares; 6 1/2% cumulative convertible; 4,915,196 shares issued and outstanding, aggregate liquidation preference of $122,880 | $ 119,263 | $ 119,263 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Common shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common shares of beneficial interest, shares authorized (in shares) | 350,000,000 | 350,000,000 | 350,000,000 |
Common shares of beneficial interest, shares issued (in shares) | 121,922,120 | 121,922,120 | 121,572,155 |
Common shares of beneficial interest, shares outstanding (in shares) | 121,922,120 | 121,922,120 | 121,572,155 |
Series D | |||
Preferred shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred shares of beneficial interest, shares authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred shares, dividend yield | 6.50% | 6.50% | 6.50% |
Preferred shares of beneficial interest, shares issued (in shares) | 4,915,196 | 4,915,196 | 4,915,196 |
Preferred shares, of beneficial interest, shares outstanding (in shares) | 4,915,196 | 4,915,196 | 4,915,196 |
Preferred shares, aggregate liquidation preference | $ 122,880 | $ 122,880 | $ 122,880 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED 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 | |
Revenues: | ||||
Rental revenue | $ 30,574 | $ 45,569 | $ 69,464 | $ 100,842 |
Total revenues | 33,368 | 48,636 | 75,120 | 107,224 |
Expenses: | ||||
Operating expenses | 10,974 | 19,521 | 26,754 | 44,120 |
Depreciation and amortization | 7,561 | 13,021 | 16,146 | 26,924 |
General and administrative | 9,533 | 11,222 | 21,629 | 24,561 |
Loss on asset impairment | 0 | 0 | 0 | 12,087 |
Total expenses | 28,068 | 43,764 | 64,529 | 107,692 |
Interest and other income, net | 20,695 | 12,668 | 38,470 | 18,448 |
Interest expense (including net amortization of debt discounts, premiums and deferred financing fees of $154, $645, $319 and $1,446, respectively) | (4,070) | (6,350) | (8,276) | (16,465) |
Loss on early extinguishment of debt | (6,374) | (1,536) | (6,374) | (6,403) |
Gain on sale of properties, net | 227,166 | 26,937 | 420,203 | 232,148 |
Income before income taxes | 242,717 | 36,591 | 454,614 | 227,260 |
Income tax (expense) benefit | (340) | 456 | (1,640) | (2,551) |
Net income | 242,377 | 37,047 | 452,974 | 224,709 |
Net income attributable to noncontrolling interest | (91) | (14) | (170) | (77) |
Net income attributable to Equity Commonwealth | 242,286 | 37,033 | 452,804 | 224,632 |
Preferred distributions | (1,997) | (1,997) | (3,994) | (3,994) |
Net income attributable to Equity Commonwealth common shareholders | $ 240,289 | $ 35,036 | $ 448,810 | $ 220,638 |
Weighted average common shares outstanding — basic (in shares) | 122,122 | 121,822 | 122,041 | 122,839 |
Weighted average common shares outstanding — diluted (in shares) | 125,862 | 122,649 | 125,841 | 126,027 |
Earnings per common share attributable to Equity Commonwealth common shareholders: | ||||
Basic (in dollars per share) | $ 1.97 | $ 0.29 | $ 3.68 | $ 1.80 |
Diluted (in dollars per share) | $ 1.93 | $ 0.29 | $ 3.60 | $ 1.78 |
Other revenue | ||||
Revenues: | ||||
Other revenue | $ 2,794 | $ 3,067 | $ 5,656 | $ 6,382 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Amortization of debt discounts, premiums and deferred financing fees | $ 154 | $ 645 | $ 319 | $ 1,446 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 242,377 | $ 37,047 | $ 452,974 | $ 224,709 |
Other comprehensive income, net of tax: | ||||
Unrealized gain on derivative instruments | 0 | 339 | 0 | 456 |
Unrealized gain on marketable securities | 0 | 298 | 342 | 72 |
Total comprehensive income | 242,377 | 37,684 | 453,316 | 225,237 |
Comprehensive income attributable to the noncontrolling interest | (91) | (14) | (170) | (77) |
Total comprehensive income attributable to Equity Commonwealth | $ 242,286 | $ 37,670 | $ 453,146 | $ 225,160 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Cumulative Preferred Distributions | Common Shares | Cumulative Common Distributions | Additional Paid in Capital | Cumulative Net Income | Cumulative Other Comprehensive Loss | Noncontrolling Interest | Series DPreferred Shares |
Balance as of beginning of period (in shares) at Dec. 31, 2017 | 124,217,616 | 4,915,196 | |||||||
Balance as of beginning of period at Dec. 31, 2017 | $ 3,300,495 | $ (685,748) | $ 1,242 | $ (3,111,868) | $ 4,380,313 | $ 2,596,259 | $ (95) | $ 1,129 | $ 119,263 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 224,709 | 224,632 | 77 | ||||||
Unrealized gain on derivative instruments | 456 | 456 | |||||||
Unrealized gain on marketable securities | 72 | 72 | |||||||
Repurchase of shares (in shares) | (3,027,557) | ||||||||
Repurchase of shares | (89,910) | $ (30) | (89,880) | ||||||
Share-based compensation (in shares) | 292,614 | ||||||||
Share-based compensation | 10,480 | $ 3 | 9,822 | 655 | |||||
Contributions | 1 | 1 | |||||||
Distributions | (3,994) | (3,994) | |||||||
Adjustment for noncontrolling interest | 567 | (567) | |||||||
Balance as of end of period (in shares) at Jun. 30, 2018 | 121,482,673 | 4,915,196 | |||||||
Balance as of end of period at Jun. 30, 2018 | 3,442,309 | (689,742) | $ 1,215 | (3,111,868) | 4,300,822 | 2,822,793 | (1,469) | 1,295 | $ 119,263 |
Balance as of beginning of period (in shares) at Mar. 31, 2018 | 121,457,073 | 4,915,196 | |||||||
Balance as of beginning of period at Mar. 31, 2018 | 3,401,479 | (687,745) | $ 1,214 | (3,111,868) | 4,295,772 | 2,785,760 | (2,106) | 1,189 | $ 119,263 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 37,047 | 37,033 | 14 | ||||||
Unrealized gain on derivative instruments | 339 | 339 | |||||||
Unrealized gain on marketable securities | 298 | 298 | |||||||
Share-based compensation (in shares) | 25,600 | ||||||||
Share-based compensation | 5,142 | $ 1 | 4,812 | 329 | |||||
Contributions | 1 | 1 | |||||||
Distributions | (1,997) | (1,997) | |||||||
Adjustment for noncontrolling interest | 238 | (238) | |||||||
Balance as of end of period (in shares) at Jun. 30, 2018 | 121,482,673 | 4,915,196 | |||||||
Balance as of end of period at Jun. 30, 2018 | 3,442,309 | (689,742) | $ 1,215 | (3,111,868) | 4,300,822 | 2,822,793 | (1,469) | 1,295 | $ 119,263 |
Balance as of beginning of period (in shares) at Dec. 31, 2018 | 121,572,155 | 4,915,196 | |||||||
Balance as of beginning of period at Dec. 31, 2018 | 3,183,998 | (693,736) | $ 1,216 | (3,420,548) | 4,305,974 | 2,870,974 | (342) | 1,197 | $ 119,263 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 452,974 | 452,804 | 170 | ||||||
Unrealized gain on derivative instruments | 0 | ||||||||
Unrealized gain on marketable securities | 342 | $ 342 | |||||||
Repurchase of shares (in shares) | (168,327) | ||||||||
Repurchase of shares | (5,487) | $ (2) | (5,485) | ||||||
Share-based compensation (in shares) | 518,292 | ||||||||
Share-based compensation | 7,648 | $ 5 | 6,978 | 665 | |||||
Distributions | (3,852) | (3,994) | 142 | ||||||
Adjustment for noncontrolling interest | 582 | (582) | |||||||
Balance as of end of period (in shares) at Jun. 30, 2019 | 121,922,120 | 4,915,196 | |||||||
Balance as of end of period at Jun. 30, 2019 | 3,635,623 | (697,730) | $ 1,219 | (3,420,406) | 4,308,049 | 3,323,778 | 1,450 | $ 119,263 | |
Balance as of beginning of period (in shares) at Mar. 31, 2019 | 121,899,625 | 4,915,196 | |||||||
Balance as of beginning of period at Mar. 31, 2019 | 3,391,561 | (695,733) | $ 1,219 | (3,420,512) | 4,304,560 | 3,081,492 | 1,272 | $ 119,263 | |
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 242,377 | 242,286 | 91 | ||||||
Unrealized gain on derivative instruments | 0 | ||||||||
Unrealized gain on marketable securities | 0 | ||||||||
Repurchase of shares (in shares) | (4,414) | ||||||||
Repurchase of shares | (145) | (145) | |||||||
Share-based compensation (in shares) | 26,909 | ||||||||
Share-based compensation | 3,721 | 3,393 | 328 | ||||||
Distributions | (1,891) | (1,997) | 106 | ||||||
Adjustment for noncontrolling interest | 241 | (241) | |||||||
Balance as of end of period (in shares) at Jun. 30, 2019 | 121,922,120 | 4,915,196 | |||||||
Balance as of end of period at Jun. 30, 2019 | $ 3,635,623 | $ (697,730) | $ 1,219 | $ (3,420,406) | $ 4,308,049 | $ 3,323,778 | $ 1,450 | $ 119,263 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 452,974 | $ 224,709 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation | 13,531 | 21,740 |
Net amortization of debt discounts, premiums and deferred financing fees | 319 | 1,446 |
Straight line rental income | (848) | (2,550) |
Amortization of acquired real estate leases | 105 | 1,562 |
Other amortization | 2,375 | 3,505 |
Amortization of right-of-use asset | 364 | |
Share-based compensation | 7,648 | 10,480 |
Loss on asset impairment | 0 | 12,087 |
Loss on marketable securities | 0 | 4,987 |
Loss on early extinguishment of debt | 6,374 | 6,403 |
Net gain on sale of properties | (420,203) | (232,148) |
Change in assets and liabilities: | ||
Rents receivable and other assets | (8,036) | (16,856) |
Accounts payable, accrued expenses and other | (11,179) | (8,514) |
Rent collected in advance | (2,183) | (2,971) |
Cash provided by operating activities | 41,241 | 23,880 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Real estate improvements | (18,073) | (32,203) |
Insurance proceeds received | 0 | 1,443 |
Proceeds from sale of properties, net | 771,787 | 807,322 |
Proceeds from maturity of marketable securities | 250,000 | 0 |
Proceeds from sale of marketable securities | 0 | 23,933 |
Cash provided by investing activities | 1,003,714 | 800,495 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repurchase and retirement of common shares | (5,487) | (89,910) |
Payments on borrowings | (255,557) | (575,526) |
Contributions from holders of noncontrolling interest | 0 | 1 |
Distributions to common shareholders | (1,160) | 0 |
Distributions to preferred shareholders | (3,994) | (3,994) |
Cash used in financing activities | (266,198) | (669,429) |
Increase in cash, cash equivalents, and restricted cash | 778,757 | 154,946 |
Cash, cash equivalents, and restricted cash at beginning of period | 2,404,101 | 2,360,590 |
Cash, cash equivalents, and restricted cash at end of period | 3,182,858 | 2,515,536 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Interest paid | 12,291 | 17,704 |
Taxes paid, net | 2,873 | 2,417 |
NON-CASH INVESTING ACTIVITIES: | ||
Recognition of right-of-use asset and lease liability | 1,503 | |
Accrued capital expenditures | 3,992 | 4,539 |
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | $ 2,404,101 | $ 2,360,590 |
Business
Business | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Equity Commonwealth, or the Company, is a real estate investment trust, or REIT, formed in 1986 under the laws of the State of Maryland. Our business is primarily the ownership and operation of office properties in the United States. On November 10, 2016, the Company converted to what is commonly referred to as an umbrella partnership real estate investment trust, or UPREIT. In connection with this conversion, the Company contributed substantially all of its assets to EQC Operating Trust, a Maryland real estate investment trust, or the Operating Trust, and the Operating Trust assumed substantially all of the Company’s liabilities pursuant to a contribution and assignment agreement between the Company and the Operating Trust. The Company now conducts and intends to continue to conduct substantially all of its activities through the Operating Trust. The Company beneficially owned 99.96% of the outstanding shares of beneficial interest, designated as units, in the Operating Trust, or OP Units, as of June 30, 2019 , and the Company is the sole trustee of the Operating Trust. As the sole trustee, the Company generally has the power under the declaration of trust of the Operating Trust to manage and conduct the business of the Operating Trust, subject to certain limited approval and voting rights of other holders of OP Units. At June 30, 2019 , our portfolio consisted of 7 properties ( 12 buildings), with a combined 2.5 million square feet. As of June 30, 2019 , we had $3.2 billion of cash and cash equivalents. |
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 condensed consolidated financial statements of EQC have been prepared without audit. Certain information and footnote 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 appropriate. 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, or our Annual Report, for the year ended December 31, 2018 . Capitalized terms used, but not defined in this Quarterly Report, have the same meanings as in our Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. All intercompany transactions and balances with or among our subsidiaries have been eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Certain reclassifications have been made to the prior year's financial statements to conform to the current year’s presentation. The preparation of 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 the assessment of the collectability of rental revenue, purchase price allocations, useful lives of fixed assets and impairment of real estate and intangible assets. Share amounts are presented in whole numbers, except where noted. Recent Accounting Pronouncements In August 2018, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which changes the fair value measurement disclosure requirements of FASB Accounting Standards Codification, or ASC, 820. This update is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. We do not expect the adoption of ASU 2018-13 to have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. This update is effective for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years. We adopted ASU 2018-07 on January 1, 2019, and the adoption did not have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires more timely recognition of credit losses associated with financial assets. This update is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. We are currently evaluating the impact, if any, that the adoption of ASU 2016-13 will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASU 2016-02 supersedes previous leasing standards. For leases where we are the lessor, we account for these leases using an approach that is substantially equivalent to previous guidance prior to the adoption of ASU 2016-02. Additionally, under ASU 2016-02, lessors may only capitalize incremental direct leasing costs. For leases in which we are the lessee, we recognize a right-of-use asset and a lease liability equal to the present value of the minimum lease payments, with rent expense being recognized on a straight-line basis and the right of use asset being reduced when lease payments are made. In July 2018, the FASB issued ASU 2018-11 to provide entities with relief from the costs of implementing certain aspects of ASU 2016-02. The amendment to the new leases standard includes a practical expedient that provides lessors an option not to separate lease and non-lease components when certain criteria are met and instead account for those components as a single component under the new leases standard. The amendment also provides a transition option that permits the application of the new guidance as of the adoption date rather than to all periods presented. We elected the practical expedient to account for both our lease (primarily base rent) and non-lease (primarily tenant reimbursements) components as a single component under the leases standard and elected the new transition option. We adopted these pronouncements on January 1, 2019, and the adoption did not have a material impact on our consolidated financial statements, both as a lessor and as a lessee. |
Real Estate Properties
Real Estate Properties | 6 Months Ended |
Jun. 30, 2019 | |
Real Estate [Abstract] | |
Real Estate Properties | Real Estate Properties During the six months ended June 30, 2019 and 2018 , we made improvements, excluding tenant-funded improvements, to our properties totaling $8.5 million and $29.6 million , respectively. Property Dispositions: During the six months ended June 30, 2019 , we sold the following properties (dollars in thousands): Property Date Sold Number of Number of Square Footage Gross Sales Price Gain on Sale 1735 Market Street (1) March 2019 1 1 1,286,936 $ 451,600 $ 192,985 600 108 th Avenue NE (2) April 2019 1 1 254,510 195,000 149,009 Research Park (3) June 2019 1 4 1,110,007 165,500 78,158 3 6 2,651,453 $ 812,100 $ 420,152 (1) Certain of our subsidiaries sold 100% of the equity interests in the fee simple owner of this property. The sale of this property did not represent a strategic shift under ASC Topic 205. However, the sale does represent an individually significant disposition. The operating results of this property are included in continuing operations for all periods presented through the date of sale. Net income related to this property was $0.1 million and $2.0 million for the three months ended June 30, 2019 and 2018, respectively, and $197.2 million (of which $193.0 million related to the gain on sale) and $3.8 million for the six months ended June 30, 2019 and 2018, respectively. (2) The property includes an office building and additional development rights. (3) There is consideration of $2.0 million being held in escrow related to the sale of this property. To the extent any of these proceeds are ultimately released to the Company, the gain on sale will increase. Lease Payments The future minimum lease payments, excluding tenant reimbursement revenue, scheduled to be received by us during the current terms of our leases as of June 30, 2019 are as follows (in thousands): 2019 $ 33,114 2020 53,642 2021 58,692 2022 52,368 2023 46,859 Thereafter 340,138 $ 584,813 Rental revenue consists of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Lease payments $ 20,429 $ 30,628 $ 48,334 $ 70,164 Variable lease payments 10,145 14,941 21,130 30,678 Rental revenue $ 30,574 $ 45,569 $ 69,464 $ 100,842 |
Marketable Securities
Marketable Securities | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Marketable Securities As of December 31, 2018, our marketable securities consisted of United States Treasury notes and were classified as available-for-sale. The United States Treasury notes matured in January and February 2019, and as of June 30, 2019 , we do not have any marketable securities. Below is a summary of our marketable securities as of December 31, 2018 (in thousands): December 31, 2018 Amortized Cost Unrealized Loss Estimated Fair Value Marketable securities $ 249,944 $ (342 ) $ 249,602 |
Indebtedness
Indebtedness | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness Senior Unsecured Notes: On June 28, 2019, we redeemed all $250.0 million of our 5.875% senior unsecured notes due 2020 and recognized a loss on early extinguishment of debt of $6.4 million for the three and six months ended June 30, 2019 from prepayment fees, the write off of unamortized deferred financing fees and the write off of an unamortized discount. Debt Covenants: After the redemption of our 5.875% senior unsecured notes due 2020 on June 28, 2019, we no longer have any notes outstanding under our public debt indenture and related supplements, collectively the Indenture, and we are no longer required to maintain the financial ratio covenants prescribed in the Indenture. As a result, we are no longer rated by the rating agencies. Mortgage Note Payable: At June 30, 2019 , one of our properties with an aggregate net book value of $43.9 million had a secured mortgage note totaling $26.1 million (including a net premium and unamortized deferred financing fees) maturing in 2021. |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Common Share Issuances: See Note 10 for information regarding equity issuances related to share-based compensation. Common Share Repurchases: On March 13, 2019, our Board of Trustees authorized the repurchase of up to $150.0 million of our outstanding common shares over the twelve months following the date of authorization. During the six months ended June 30, 2019 , we did no t repurchase any of our common shares under our share repurchase program. The $150.0 million of remaining authorization available under our share repurchase program as of June 30, 2019 is scheduled to expire on March 13, 2020. During the six months ended June 30, 2019 and 2018 , certain of our employees surrendered 168,327 and 57,348 common shares owned by them, respectively, to satisfy their statutory tax withholding obligations in connection with the vesting of such common shares. Common Share and Unit Distribution: On September 26, 2018, our Board of Trustees declared a special, one-time cash distribution of $2.50 per common share/unit to shareholders/unitholders of record on October 9, 2018. On October 23, 2018, we paid this distribution to such shareholders/unitholders in the aggregate amount of $304.7 million . In February 2019, the number of earned awards for certain recipients of the Company's restricted stock units was determined. Pursuant to the terms of such awards, we paid a one-time catch-up cash distribution of $2.50 per common share/unit to these recipients in the aggregate amount of $1.2 million upon such determination. Preferred Share Distributions: In 2019 , our Board of Trustees declared distributions on our series D preferred shares to date as follows: Declaration Date Record Date Payment Date Series D Dividend Per Share January 11, 2019 January 30, 2019 February 15, 2019 $ 0.40625 April 11, 2019 April 29, 2019 May 15, 2019 $ 0.40625 July 12, 2019 July 30, 2019 August 15, 2019 $ 0.40625 |
Noncontrolling Interest
Noncontrolling Interest | 6 Months Ended |
Jun. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | Noncontrolling Interest Noncontrolling interest represents the portion of the OP Units not beneficially owned by the Company. The ownership of an OP Unit and a common share of beneficial interest have essentially the same economic characteristics. Distributions with respect to OP Units will generally mirror distributions with respect to the Company’s common shares. Unitholders (other than the Company) generally have the right, commencing six months from the date of issuance of such OP Units, to cause the Operating Trust to redeem their OP Units in exchange for cash or, at the option of the Company, common shares of the Company on a one -for-one basis. As sole trustee, the Company will have the sole discretion to elect whether the redemption right will be satisfied by the Company in cash or the Company’s common shares. As a result, the Noncontrolling interest is classified as permanent equity. As of June 30, 2019 , the portion of the Operating Trust not beneficially owned by the Company is in the form of OP Units and LTIP Units (see Note 10 for a description of LTIP Units). LTIP Units may be subject to additional vesting requirements. The following table presents the changes in Equity Commonwealth’s issued and outstanding common shares and units for the six months ended June 30, 2019 : Common Shares OP Units and LTIP Units Total Outstanding at January 1, 2019 121,572,155 45,720 121,617,875 Repurchase of shares (168,327 ) — (168,327 ) Restricted share grants, time-based LTIP Unit grants and vested restricted stock units 518,292 2,940 521,232 Outstanding at June 30, 2019 121,922,120 48,660 121,970,780 Noncontrolling ownership interest in the Operating Trust 0.04 % The carrying value of the Noncontrolling interest is allocated based on the number of OP Units and LTIP Units in proportion to the number of OP Units and LTIP Units plus the number of common shares. We adjust the Noncontrolling interest balance at the end of each period to reflect the noncontrolling partners’ interest in the net assets of the Operating Trust. Net income is allocated to the Noncontrolling interest in the Operating Trust based on the weighted average ownership percentage during the period. Equity Commonwealth’s weighted average ownership interest in the Operating Trust was 99.96% and 99.96% for the three and six months ended June 30, 2019 , respectively. |
Cumulative Other Comprehensive
Cumulative Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Cumulative Other Comprehensive Loss | Cumulative Other Comprehensive Loss The following table presents the amounts recognized in cumulative other comprehensive loss for the six months ended June 30, 2019 (in thousands): Unrealized Loss on Marketable Securities Balance as of January 1, 2019 $ (342 ) Other comprehensive income 342 Balance as of June 30, 2019 $ — |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, and are generally not subject to federal and state income taxes provided we distribute a sufficient amount of our taxable income to our shareholders and meet other requirements for qualifying as a REIT. We are also subject to certain state and local taxes without regard to our REIT status. Our provision for income taxes consists of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Current: State and local $ (340 ) $ 456 $ (640 ) $ (2,551 ) Deferred: State and local — — (1,000 ) — Income tax (expense) benefit $ (340 ) $ 456 $ (1,640 ) $ (2,551 ) During the six months ended June 30, 2019 , we recorded $1.0 million related to an uncertain tax position, as part of our income tax provision. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation At our annual meeting of shareholders on June 20, 2019, our shareholders approved an amendment to the Equity Commonwealth 2015 Omnibus Incentive Plan to increase the number of common shares of beneficial interest authorized thereunder by 2,500,000 . Recipients of the Company’s restricted shares have the same voting rights as any other common shareholder. During the period of restriction, holders of unvested restricted shares are eligible to receive dividend payments on their shares at the same rate and on the same date as any other common shareholder. The restricted shares are service based awards and vest over a four -year period. Recipients of the Company’s restricted stock units, or RSUs, are entitled to receive dividends with respect to the common shares underlying the RSUs if and when the RSUs are earned, at which time the recipient will be entitled to receive an amount in cash equal to the aggregate amount of cash dividends that would have been paid in respect of the common shares underlying the recipient’s earned RSUs had such common shares been issued to the recipient on the first day of the performance period. To the extent that an award does not vest, the dividends related to unvested RSUs will be forfeited. The RSUs are market-based awards with a service condition and recipients may earn RSUs based on the Company’s total shareholder return, or TSR, relative to the TSRs of the companies that comprise the NAREIT Office Index over a three -year performance period. Following the end of the three -year performance period, the number of earned awards will be determined. The earned awards vest in two tranches with 50% of the earned award vesting following the end of the performance period on the date the Compensation Committee of our Board of Trustees, or the Committee, determines the level of achievement of the performance metric and the remaining 50% of the earned award vesting approximately one year thereafter, subject to the grant recipient’s continued employment. Compensation expense for the RSUs is determined using a Monte Carlo simulation model and is recognized ratably from the grant date to the vesting date of each tranche. LTIP Units are a class of beneficial interests in the Operating Trust that may be issued to employees, officers or trustees of the Operating Trust, the Company or their subsidiaries. Time-based LTIP Units have the same general characteristics as restricted shares and market-based LTIP Units have the same general characteristics as RSUs. Each LTIP Unit will convert automatically into an OP Unit on a one -for-one basis when the LTIP Unit becomes vested and its capital account is equalized with the per-unit capital account of the OP Units. Holders of LTIP Units generally will be entitled to receive the same per-unit distributions as the other outstanding OP Units in the Operating Trust, except that market-based LTIP Units will not participate in distributions until expiration of the applicable performance period, at which time any earned market-based LTIP Units generally will become entitled to receive a catch-up distribution for the periods prior to such time. 2019 Equity Award Activity During the six months ended June 30, 2019 , 382,413 RSUs vested, and, as a result, we issued 382,413 common shares, prior to certain employees surrendering their common shares to satisfy tax withholding obligations (see Note 6). On June 20, 2019, in accordance with the Company’s compensation plan for independent Trustees, the Committee awarded each of the nine independent Trustees $0.1 million in restricted shares or time-based LTIP Units as part of their compensation for the 2019-2020 year of service on the Board of Trustees. These awards equated to 2,940 shares or time-based LTIP Units per Trustee, for a total of 23,520 shares and 2,940 time-based LTIP Units, valued at $34.01 per share and unit, the closing price of our common shares on the New York Stock Exchange (NYSE) on that day. These shares and time-based LTIP Units vest one year after the date of the award. On January 29, 2019, the Committee approved grants in the aggregate amount of 112,359 restricted shares and 228,128 RSUs at target ( 568,609 RSUs at maximum) to the Company’s officers, certain employees and to Mr. Zell, the Chairman of our Board of Trustees, as part of their compensation for fiscal year 2018. The restricted shares granted on January 29, 2019 were valued at $31.77 per share, the closing price of our common shares on the NYSE on that day. The assumptions and fair value for the RSUs granted during the six months ended June 30, 2019 are included in the following table on a per share basis. 2019 Fair value of RSUs granted $ 39.65 Expected term (years) 4 Expected volatility 13.98 % Risk-free rate 2.52 % 2018 Equity Award Activity During the six months ended June 30, 2018 , 141,605 RSUs vested, and, as a result, we issued 141,605 common shares, prior to certain employees surrendering their common shares to satisfy tax withholding obligations (see Note 6). On June 20, 2018, in accordance with the Company’s compensation plan for independent Trustees, the Committee awarded each of the nine independent Trustees $0.1 million in restricted shares or time-based LTIP Units as part of their compensation for the 2018-2019 year of service on the Board of Trustees. These awards equated to 3,200 shares or time-based LTIP Units per Trustee, for a total of 25,600 shares and 3,200 time-based LTIP Units, valued at $31.25 per share and unit, the closing price of our common shares on the New York Stock Exchange (NYSE) on that day. These shares and time-based LTIP Units vested one year after the date of the award. On January 29, 2018, the Committee approved grants in the aggregate amount of 125,409 restricted shares and 254,615 RSUs at target ( 634,628 RSUs at maximum) to the Company’s officers, certain employees and to Mr. Zell, the Chairman of our Board of Trustees, as part of their compensation for fiscal year 2017. The restricted shares were valued at $29.78 per share, the closing price of our common shares on the NYSE on the grant date. The RSUs were valued at $37.13 per share, their fair value on the grant date. Outstanding Equity Awards As of June 30, 2019 , the estimated future compensation expense for all unvested restricted shares and time-based LTIP Units was $8.2 million . Compensation expense for the restricted share and time-based LTIP Unit awards is being recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The weighted average period over which the future compensation expense will be recorded for the restricted shares and time-based LTIP units is approximately 2.5 years . As of June 30, 2019 , the estimated future compensation expense for all unvested RSUs and market-based LTIP Units was $16.7 million . The weighted average period over which the future compensation expense will be recorded for the RSUs and market-based LTIP Units is approximately 2.4 years . During the three months ended June 30, 2019 and 2018 , we recorded $3.7 million and $5.1 million , respectively, and during the six months ended June 30, 2019 and 2018 , we recorded $7.6 million and $10.5 million , respectively, of compensation expense, net of forfeitures, in general and administrative expense for grants to our trustees and employees related to our equity compensation plans. Compensation expense recorded during the three months ended June 30, 2019 includes $0.3 million , and compensation expense recorded during the six months ended June 30, 2019 and 2018 includes $0.8 million and $0.4 million , respectively, of accelerated vesting due to staffing reductions. Forfeitures are recognized as they occur. At June 30, 2019 , 2,857,696 shares/units remain available for issuance under the Equity Commonwealth 2015 Omnibus Incentive Plan, as amended. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities As of June 30, 2019 , we do no t have any assets measured at fair value. Financial Instruments Our financial instruments include our cash and cash equivalents, restricted cash, marketable securities, senior unsecured debt and mortgage note payable. At June 30, 2019 and December 31, 2018 , the fair value of these additional financial instruments were not materially different from their carrying values, except as follows (in thousands): June 30, 2019 December 31, 2018 Principal Balance Fair Value Principal Balance Fair Value Senior unsecured debt and mortgage note payable $ 25,719 $ 26,588 $ 276,000 $ 283,214 The fair values of our senior notes are based on quoted market prices (level 2 inputs), and the fair value of our mortgage note payable is based on estimates using discounted cash flow analyses and currently prevailing interest rates adjusted by credit risk spreads (level 3 inputs). Other financial instruments that potentially subject us to concentrations of credit risk consist principally of rents receivable. As of June 30, 2019 , we have one tenant that is responsible for 22.7% of our total annualized rents, and no other single tenant of ours is responsible for more than 10.0% |
Earnings Per Common Share
Earnings Per Common Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share The following table sets forth the computation of basic and diluted earnings per share (amounts in thousands except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Numerator for earnings per common share - basic: Net income $ 242,377 $ 37,047 $ 452,974 $ 224,709 Net income attributable to noncontrolling interest (91 ) (14 ) (170 ) (77 ) Preferred distributions (1,997 ) (1,997 ) (3,994 ) (3,994 ) Numerator for net income per share - basic $ 240,289 $ 35,036 $ 448,810 $ 220,638 Numerator for earnings per common share - diluted: Net income $ 242,377 $ 37,047 $ 452,974 $ 224,709 Net income attributable to noncontrolling interests (91 ) (14 ) (170 ) (77 ) Preferred distributions — (1,997 ) — — Numerator for net income per share - diluted $ 242,286 $ 35,036 $ 452,804 $ 224,632 Denominator for earnings per common share - basic and diluted: Weighted average number of common shares outstanding - basic (1) 122,122 121,822 122,041 122,839 RSUs (2) 1,005 762 1,064 746 LTIP Units (3) 172 65 173 79 Series D preferred shares; 6 1/2% cumulative convertible (4) 2,563 — 2,563 2,363 Weighted average number of common shares outstanding - diluted 125,862 122,649 125,841 126,027 Net income per common share attributable to Equity Commonwealth common shareholders: Basic $ 1.97 $ 0.29 $ 3.68 $ 1.80 Diluted $ 1.93 $ 0.29 $ 3.60 $ 1.78 Anti-dilutive securities: Effect of Series D preferred shares; 6 1/2% cumulative convertible (4) — 2,363 — — Effect of LTIP Units 32 42 34 42 Effect of OP Units (5) 14 1 12 1 (1) The three months ended June 30, 2019 and 2018 , includes 220 and 362 weighted-average, unvested, earned RSUs, respectively, and the six months ended June 30, 2019 and 2018 , includes 203 and 335 weighted-average, unvested, earned RSUs, respectively. (2) Represents weighted-average number of common shares that would have been issued if the quarter-end was the measurement date for unvested, unearned RSUs. (3) Represents the weighted-average dilutive shares issuable from LTIP Units if the quarter-end was the measurement date for the periods shown. (4) The Series D preferred shares are excluded from the diluted earnings per share calculation for the three months ended June 30, 2018 because including the Series D preferred shares would also require that the preferred distributions be added back to net income, resulting in anti-dilution. (5) Beneficial interests in the Operating Trust. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our primary business is the ownership and operation of office properties, and we currently have one reportable segment. More than 90% of our revenues for the six months ended June 30, 2019 |
Related Person Transactions
Related Person Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions The following discussion includes a description of our related person transactions for the six months ended June 30, 2019 and 2018 . Two North Riverside Plaza Joint Venture Limited Partnership: We have a lease with Two North Riverside Plaza Joint Venture Limited Partnership, an entity associated with Mr. Zell, our Chairman, to occupy office space on the twentieth and twenty-first floors of Two North Riverside Plaza in Chicago, Illinois (20th/21st Floor Office Lease). The initial term of the lease is approximately five years , expiring in December 2020, with one 5 -year renewal option. We made improvements to the office space utilizing the $0.7 million tenant improvement allowance pursuant to the lease. In connection with the 20th/21st Floor Office Lease, we also have a storage lease with Two North Riverside Plaza Joint Venture Limited Partnership for storage space in the basement of Two North Riverside Plaza. The storage lease expires December 31, 2020; however, each party has the right to terminate on 30 days' prior written notice. During the three months ended June 30, 2019 and 2018 , we recognized expense of $0.3 million and $0.2 million , respectively, and during the six months ended June 30, 2019 and 2018 , we recognized $0.5 million and $0.4 million , respectively, pursuant to the 20 th /21 st Floor Office Lease and the related storage space. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 12, 2019, our Board of Trustees declared a dividend of $0.40625 per series D preferred share, which will be paid on August 15, 2019 to shareholders of record on July 30, 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of EQC have been prepared without audit. Certain information and footnote 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 appropriate. 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, or our Annual Report, for the year ended December 31, 2018 . Capitalized terms used, but not defined in this Quarterly Report, have the same meanings as in our Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. All intercompany transactions and balances with or among our subsidiaries have been eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Certain reclassifications have been made to the prior year's financial statements to conform to the current year’s presentation. The preparation of 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 the assessment of the collectability of rental revenue, purchase price allocations, useful lives of fixed assets and impairment of real estate and intangible assets. Share amounts are presented in whole numbers, except where noted. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2018, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which changes the fair value measurement disclosure requirements of FASB Accounting Standards Codification, or ASC, 820. This update is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. We do not expect the adoption of ASU 2018-13 to have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. This update is effective for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years. We adopted ASU 2018-07 on January 1, 2019, and the adoption did not have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires more timely recognition of credit losses associated with financial assets. This update is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. We are currently evaluating the impact, if any, that the adoption of ASU 2016-13 will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASU 2016-02 supersedes previous leasing standards. For leases where we are the lessor, we account for these leases using an approach that is substantially equivalent to previous guidance prior to the adoption of ASU 2016-02. Additionally, under ASU 2016-02, lessors may only capitalize incremental direct leasing costs. For leases in which we are the lessee, we recognize a right-of-use asset and a lease liability equal to the present value of the minimum lease payments, with rent expense being recognized on a straight-line basis and the right of use asset being reduced when lease payments are made. In July 2018, the FASB issued ASU 2018-11 to provide entities with relief from the costs of implementing certain aspects of ASU 2016-02. The amendment to the new leases standard includes a practical expedient that provides lessors an option not to separate lease and non-lease components when certain criteria are met and instead account for those components as a single component under the new leases standard. The amendment also provides a transition option that permits the application of the new guidance as of the adoption date rather than to all periods presented. We elected the practical expedient to account for both our lease (primarily base rent) and non-lease (primarily tenant reimbursements) components as a single component under the leases standard and elected the new transition option. We adopted these pronouncements on January 1, 2019, and the adoption did not have a material impact on our consolidated financial statements, both as a lessor and as a lessee. |
Marketable Securities | our marketable securities consisted of United States Treasury notes and were classified as available-for-sale. The United States Treasury notes matured in January and February 2019, and as of June 30, 2019 , we do not have any marketable securities. |
Real Estate Properties (Tables)
Real Estate Properties (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Real Estate [Abstract] | |
Summary of Properties Sold and Income Statement Information for Properties Disposed of | During the six months ended June 30, 2019 , we sold the following properties (dollars in thousands): Property Date Sold Number of Number of Square Footage Gross Sales Price Gain on Sale 1735 Market Street (1) March 2019 1 1 1,286,936 $ 451,600 $ 192,985 600 108 th Avenue NE (2) April 2019 1 1 254,510 195,000 149,009 Research Park (3) June 2019 1 4 1,110,007 165,500 78,158 3 6 2,651,453 $ 812,100 $ 420,152 (1) Certain of our subsidiaries sold 100% of the equity interests in the fee simple owner of this property. The sale of this property did not represent a strategic shift under ASC Topic 205. However, the sale does represent an individually significant disposition. The operating results of this property are included in continuing operations for all periods presented through the date of sale. Net income related to this property was $0.1 million and $2.0 million for the three months ended June 30, 2019 and 2018, respectively, and $197.2 million (of which $193.0 million related to the gain on sale) and $3.8 million for the six months ended June 30, 2019 and 2018, respectively. (2) The property includes an office building and additional development rights. (3) There is consideration of $2.0 million being held in escrow related to the sale of this property. To the extent any of these proceeds are ultimately released to the Company, the gain on sale will increase. |
Schedule of Future Minimum Lease Payments, Excluding Tenant Reimbursement Revenue, Scheduled to be Received | The future minimum lease payments, excluding tenant reimbursement revenue, scheduled to be received by us during the current terms of our leases as of June 30, 2019 are as follows (in thousands): 2019 $ 33,114 2020 53,642 2021 58,692 2022 52,368 2023 46,859 Thereafter 340,138 $ 584,813 |
Schedule of Rental Revenue | Rental revenue consists of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Lease payments $ 20,429 $ 30,628 $ 48,334 $ 70,164 Variable lease payments 10,145 14,941 21,130 30,678 Rental revenue $ 30,574 $ 45,569 $ 69,464 $ 100,842 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Marketable Securities | Below is a summary of our marketable securities as of December 31, 2018 (in thousands): December 31, 2018 Amortized Cost Unrealized Loss Estimated Fair Value Marketable securities $ 249,944 $ (342 ) $ 249,602 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Declared Distributions | In 2019 , our Board of Trustees declared distributions on our series D preferred shares to date as follows: Declaration Date Record Date Payment Date Series D Dividend Per Share January 11, 2019 January 30, 2019 February 15, 2019 $ 0.40625 April 11, 2019 April 29, 2019 May 15, 2019 $ 0.40625 July 12, 2019 July 30, 2019 August 15, 2019 $ 0.40625 |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Schedule of Issued and Outstanding Common Shares | The following table presents the changes in Equity Commonwealth’s issued and outstanding common shares and units for the six months ended June 30, 2019 : Common Shares OP Units and LTIP Units Total Outstanding at January 1, 2019 121,572,155 45,720 121,617,875 Repurchase of shares (168,327 ) — (168,327 ) Restricted share grants, time-based LTIP Unit grants and vested restricted stock units 518,292 2,940 521,232 Outstanding at June 30, 2019 121,922,120 48,660 121,970,780 Noncontrolling ownership interest in the Operating Trust 0.04 % |
Schedule of Issued and Outstanding Units | The following table presents the changes in Equity Commonwealth’s issued and outstanding common shares and units for the six months ended June 30, 2019 : Common Shares OP Units and LTIP Units Total Outstanding at January 1, 2019 121,572,155 45,720 121,617,875 Repurchase of shares (168,327 ) — (168,327 ) Restricted share grants, time-based LTIP Unit grants and vested restricted stock units 518,292 2,940 521,232 Outstanding at June 30, 2019 121,922,120 48,660 121,970,780 Noncontrolling ownership interest in the Operating Trust 0.04 % |
Cumulative Other Comprehensiv_2
Cumulative Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Amounts Recognized in Cumulative Other Comprehensive Loss | The following table presents the amounts recognized in cumulative other comprehensive loss for the six months ended June 30, 2019 (in thousands): Unrealized Loss on Marketable Securities Balance as of January 1, 2019 $ (342 ) Other comprehensive income 342 Balance as of June 30, 2019 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | Our provision for income taxes consists of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Current: State and local $ (340 ) $ 456 $ (640 ) $ (2,551 ) Deferred: State and local — — (1,000 ) — Income tax (expense) benefit $ (340 ) $ 456 $ (1,640 ) $ (2,551 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Assumptions and Fair Values for RSUs Granted in the Period | The assumptions and fair value for the RSUs granted during the six months ended June 30, 2019 are included in the following table on a per share basis. 2019 Fair value of RSUs granted $ 39.65 Expected term (years) 4 Expected volatility 13.98 % Risk-free rate 2.52 % |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value and Carrying Value of Financial Instruments | At June 30, 2019 and December 31, 2018 , the fair value of these additional financial instruments were not materially different from their carrying values, except as follows (in thousands): June 30, 2019 December 31, 2018 Principal Balance Fair Value Principal Balance Fair Value Senior unsecured debt and mortgage note payable $ 25,719 $ 26,588 $ 276,000 $ 283,214 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (amounts in thousands except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Numerator for earnings per common share - basic: Net income $ 242,377 $ 37,047 $ 452,974 $ 224,709 Net income attributable to noncontrolling interest (91 ) (14 ) (170 ) (77 ) Preferred distributions (1,997 ) (1,997 ) (3,994 ) (3,994 ) Numerator for net income per share - basic $ 240,289 $ 35,036 $ 448,810 $ 220,638 Numerator for earnings per common share - diluted: Net income $ 242,377 $ 37,047 $ 452,974 $ 224,709 Net income attributable to noncontrolling interests (91 ) (14 ) (170 ) (77 ) Preferred distributions — (1,997 ) — — Numerator for net income per share - diluted $ 242,286 $ 35,036 $ 452,804 $ 224,632 Denominator for earnings per common share - basic and diluted: Weighted average number of common shares outstanding - basic (1) 122,122 121,822 122,041 122,839 RSUs (2) 1,005 762 1,064 746 LTIP Units (3) 172 65 173 79 Series D preferred shares; 6 1/2% cumulative convertible (4) 2,563 — 2,563 2,363 Weighted average number of common shares outstanding - diluted 125,862 122,649 125,841 126,027 Net income per common share attributable to Equity Commonwealth common shareholders: Basic $ 1.97 $ 0.29 $ 3.68 $ 1.80 Diluted $ 1.93 $ 0.29 $ 3.60 $ 1.78 Anti-dilutive securities: Effect of Series D preferred shares; 6 1/2% cumulative convertible (4) — 2,363 — — Effect of LTIP Units 32 42 34 42 Effect of OP Units (5) 14 1 12 1 (1) The three months ended June 30, 2019 and 2018 , includes 220 and 362 weighted-average, unvested, earned RSUs, respectively, and the six months ended June 30, 2019 and 2018 , includes 203 and 335 weighted-average, unvested, earned RSUs, respectively. (2) Represents weighted-average number of common shares that would have been issued if the quarter-end was the measurement date for unvested, unearned RSUs. (3) Represents the weighted-average dilutive shares issuable from LTIP Units if the quarter-end was the measurement date for the periods shown. (4) The Series D preferred shares are excluded from the diluted earnings per share calculation for the three months ended June 30, 2018 because including the Series D preferred shares would also require that the preferred distributions be added back to net income, resulting in anti-dilution. (5) Beneficial interests in the Operating Trust. |
Business (Details)
Business (Details) $ in Thousands, ft² in Millions | Jun. 30, 2019USD ($)ft²buildingproperty | Dec. 31, 2018USD ($) | Jun. 30, 2018USD ($) |
Noncontrolling Interest [Line Items] | |||
Cash and cash equivalents | $ | $ 3,180,548 | $ 2,400,803 | $ 2,507,117 |
Consolidated Properties | |||
Noncontrolling Interest [Line Items] | |||
Number of real estate properties | property | 7 | ||
Number of buildings | building | 12 | ||
Square footage (in sqft) | ft² | 2.5 | ||
Operating Trust | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest, ownership percentage by parent | 99.96% |
Real Estate Properties - Narrat
Real Estate Properties - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Real Estate [Abstract] | ||
Real estate improvements | $ 8.5 | $ 29.6 |
Real Estate Properties - Summar
Real Estate Properties - Summary of Properties Sold (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)ft²buildingproperty | Jun. 30, 2018USD ($) | |
Real Estate Properties [Line Items] | ||||
Gain on Sale | $ 227,166 | $ 26,937 | $ 420,203 | $ 232,148 |
Disposed of by Sale | ||||
Real Estate Properties [Line Items] | ||||
Number of Properties | property | 3 | |||
Number of Buildings | building | 6 | |||
Square Footage (in sqft) | ft² | 2,651,453 | |||
Gross Sales Price | $ 812,100 | |||
Gain on Sale | $ 420,152 | |||
Disposed of by Sale | 1735 Market Street | ||||
Real Estate Properties [Line Items] | ||||
Number of Properties | property | 1 | |||
Number of Buildings | building | 1 | |||
Square Footage (in sqft) | ft² | 1,286,936 | |||
Gross Sales Price | $ 451,600 | |||
Gain on Sale | $ 192,985 | |||
Percentage of equity interests in fee simple owner sold | 100.00% | 100.00% | ||
Net income included in continued operations | $ 100 | $ 2,000 | $ 197,200 | $ 3,800 |
Disposed of by Sale | 600 108th Avenue NE | ||||
Real Estate Properties [Line Items] | ||||
Number of Properties | property | 1 | |||
Number of Buildings | building | 1 | |||
Square Footage (in sqft) | ft² | 254,510 | |||
Gross Sales Price | $ 195,000 | |||
Gain on Sale | $ 149,009 | |||
Disposed of by Sale | Research Park | ||||
Real Estate Properties [Line Items] | ||||
Number of Properties | property | 1 | |||
Number of Buildings | building | 4 | |||
Square Footage (in sqft) | ft² | 1,110,007 | |||
Gross Sales Price | $ 165,500 | |||
Gain on Sale | 78,158 | |||
Consideration held in escrow | $ 2,000 |
Real Estate Properties - Lease
Real Estate Properties - Lease Payments (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Real Estate [Abstract] | |
2019 | $ 33,114 |
2020 | 53,642 |
2021 | 58,692 |
2022 | 52,368 |
2023 | 46,859 |
Thereafter | 340,138 |
Total future minimum lease payments to be received | $ 584,813 |
Real Estate Properties - Rental
Real Estate Properties - Rental Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Real Estate [Abstract] | ||||
Lease payments | $ 20,429 | $ 30,628 | $ 48,334 | $ 70,164 |
Variable lease payments | 10,145 | 14,941 | 21,130 | 30,678 |
Rental revenue | $ 30,574 | $ 45,569 | $ 69,464 | $ 100,842 |
Marketable Securities (Details)
Marketable Securities (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
Amortized Cost | $ 249,944 |
Unrealized Loss | (342) |
Estimated Fair Value | $ 249,602 |
Indebtedness - Narrative (Detai
Indebtedness - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019USD ($)property | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)property | Jun. 30, 2018USD ($) | Jun. 28, 2019USD ($) | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | ||||||
Senior unsecured notes, net | $ 250,000 | |||||
Interest rate stated percentage | 5.875% | 5.875% | ||||
Loss on early extinguishment of debt | $ 6,374 | $ 1,536 | $ 6,374 | $ 6,403 | ||
Real estate properties, net | 463,803 | 463,803 | $ 763,674 | |||
Mortgage notes payable, net | $ 26,091 | $ 26,091 | $ 26,482 | |||
Mortgage notes | ||||||
Debt Instrument [Line Items] | ||||||
Number of real estate properties secured by mortgage | property | 1 | 1 | ||||
Real estate properties, net | $ 43,900 | $ 43,900 | ||||
Mortgage notes payable, net | $ 26,100 | $ 26,100 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) | Mar. 13, 2019 | Oct. 23, 2018 | Sep. 26, 2018 | Feb. 28, 2019 | Jun. 30, 2019 | Jun. 30, 2018 |
Class of Stock [Line Items] | ||||||
Common stock, dividend declared (in dollars per share) | $ 2.50 | $ 2.50 | ||||
Common stock, cash dividends paid | $ 304,700,000 | $ 1,200,000 | ||||
Common Shares | ||||||
Class of Stock [Line Items] | ||||||
Shares paid for tax withholding for share based compensation (in shares) | 168,327 | 57,348 | ||||
Share Repurchase Program, March 13, 2019 | ||||||
Class of Stock [Line Items] | ||||||
Stock repurchase program, period in force | 12 months | |||||
Share Repurchase Program, March 13, 2019 | Common Shares | ||||||
Class of Stock [Line Items] | ||||||
Stock repurchase program, authorized amount (up to) | $ 150,000,000 | |||||
Repurchase of shares (in shares) | 0 | |||||
Stock repurchase program, remaining authorized repurchase amount | $ 150,000,000 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Declared Distributions (Details) - Series D - $ / shares | Aug. 15, 2019 | Jul. 12, 2019 | May 15, 2019 | Apr. 11, 2019 | Feb. 15, 2019 | Jan. 11, 2019 |
Class of Stock [Line Items] | ||||||
Dividend declared (in dollars per share) | $ 0.40625 | $ 0.40625 | ||||
Dividend paid (in dollars per share) | $ 0.40625 | $ 0.40625 | ||||
Scenario, Forecast | ||||||
Class of Stock [Line Items] | ||||||
Dividend paid (in dollars per share) | $ 0.40625 | |||||
Subsequent event | ||||||
Class of Stock [Line Items] | ||||||
Dividend declared (in dollars per share) | $ 0.40625 |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) - shares | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Noncontrolling Interest [Abstract] | ||
Common stock, conversion term | 6 months | |
Common stock, conversion basis (in shares) | 1 | |
Operating Trust | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest, weighted average ownership percentage by parent | 99.96% | 99.96% |
Noncontrolling Interest - Commo
Noncontrolling Interest - Common Shares and Units Activity (Details) - shares | 6 Months Ended |
Jun. 30, 2019 | |
Increase (Decrease) in Stockholders' Equity | |
Noncontrolling ownership interest in the Operating Trust | 0.04% |
Common Shares | |
Increase (Decrease) in Stockholders' Equity | |
Balance as of beginning of period (in shares) | 121,572,155 |
Repurchase of shares (in shares) | (168,327) |
Restricted share, time-based LTIP Unit grants and vested restricted stock units, net of forfeitures (in shares) | 518,292 |
Balance as of end of period (in shares) | 121,922,120 |
OP Units and LTIP Units | Noncontrolling Interest | |
Increase (Decrease) in Stockholders' Equity | |
Balance as of beginning of period (in shares) | 45,720 |
Repurchase of shares (in shares) | 0 |
Restricted share, time-based LTIP Unit grants and vested restricted stock units, net of forfeitures (in shares) | 2,940 |
Balance as of end of period (in shares) | 48,660 |
Common Stock, OP Units, and LTIP Units | |
Increase (Decrease) in Stockholders' Equity | |
Balance as of beginning of period (in shares) | 121,617,875 |
Repurchase of shares (in shares) | (168,327) |
Restricted share, time-based LTIP Unit grants and vested restricted stock units, net of forfeitures (in shares) | 521,232 |
Balance as of end of period (in shares) | 121,970,780 |
Cumulative Other Comprehensiv_3
Cumulative Other Comprehensive Loss - Schedule of Amounts Recognized in Cumulative Other Comprehensive Loss (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Amounts recognized in cumulative other comprehensive income (Loss) by component | |
Balance as of beginning of period | $ 3,183,998 |
Balance as of end of period | 3,635,623 |
Unrealized Gain (Loss) on Marketable Securities | |
Amounts recognized in cumulative other comprehensive income (Loss) by component | |
Balance as of beginning of period | (342) |
Other comprehensive income before reclassifications | 342 |
Balance as of end of period | $ 0 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Current: | ||||
State and local | $ (340) | $ 456 | $ (640) | $ (2,551) |
Total | ||||
Deferred: | ||||
State and local | 0 | 0 | (1,000) | 0 |
Total | ||||
Income tax (expense) benefit | $ (340) | $ 456 | $ (1,640) | $ (2,551) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Uncertain tax position as part of income tax provision | $ 1 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | Jun. 20, 2019USD ($)$ / sharesshares | Jan. 29, 2019$ / sharesshares | Jun. 20, 2018USD ($)shares | Jan. 29, 2018$ / sharesshares | Jun. 30, 2019USD ($)shares | Jun. 30, 2018USD ($)shares | Jun. 30, 2019USD ($)tranche$ / sharesshares | Jun. 30, 2018USD ($)shares | Dec. 31, 2018shares | Jun. 19, 2018$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common Stock (in shares) | 121,922,120 | 121,922,120 | 121,572,155 | |||||||
Compensation expense, accelerated vesting due to a staffing reduction | $ | $ 0.3 | $ 0.8 | $ 0.4 | |||||||
Common shares available for issuance (in shares) | 2,857,696 | 2,857,696 | ||||||||
General and Administrative Expense | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Compensation expense | $ | $ 3.7 | $ 5.1 | $ 7.6 | $ 10.5 | ||||||
RSUs | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 3 years | |||||||||
Number of tranches | tranche | 2 | |||||||||
Share-based compensation arrangement (in shares) | 382,413 | 141,605 | ||||||||
Common Stock (in shares) | 382,413 | 141,605 | 382,413 | 141,605 | ||||||
Exercise price (in dollars per share) | $ / shares | $ 37.13 | |||||||||
Granted shares value (in dollars per share) | $ / shares | $ 39.65 | |||||||||
RSUs | Vesting in three years | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percent | 50.00% | |||||||||
RSUs | Vesting in four years | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
Vesting percent | 50.00% | |||||||||
RSUs at target | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of equity awards granted (in shares) | 228,128 | 254,615 | ||||||||
RSUs at maximum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of equity awards granted (in shares) | 568,609 | 634,628 | ||||||||
LTIP Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Conversion basis (in shares) | 1 | 1 | ||||||||
Number of equity awards granted (in shares) | 2,940 | 3,200 | ||||||||
Restricted shares | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 4 years | |||||||||
Number of equity awards granted (in shares) | 23,520 | 112,359 | 25,600 | 125,409 | ||||||
Exercise price (in dollars per share) | $ / shares | $ 29.78 | |||||||||
Granted shares value (in dollars per share) | $ / shares | $ 31.77 | |||||||||
Restricted shares and time-based LTIP Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 1 year | 1 year | ||||||||
Number of trustees in board of trustees | 9 | 9 | ||||||||
Stock issued during period, value, restricted stock award, gross | $ | $ 0.1 | $ 0.1 | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 34.01 | $ 31.25 | ||||||||
Estimated future compensation expense for unvested shares | $ | $ 8.2 | $ 8.2 | ||||||||
Weighted average period over which compensation expense will be recorded | 2 years 6 months | |||||||||
RSUs and market-based LTIP units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Estimated future compensation expense for unvested shares | $ | $ 16.7 | $ 16.7 | ||||||||
Weighted average period over which compensation expense will be recorded | 2 years 4 months 24 days | |||||||||
Independent Trustee | Restricted shares and time-based LTIP Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of equity awards granted (in shares) | 2,940 | 3,200 | ||||||||
Equity Commonwealth 2015 Omnibus Incentive Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares authorized (in shares) | 2,500,000 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Assumptions and Fair Values for Restricted Stock Units Granted in the Period (Details) - RSUs | 6 Months Ended |
Jun. 30, 2019$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |
Fair value of RSUs granted (in dollars per share) | $ 39.65 |
Expected term | 4 years |
Expected volatility | 13.98% |
Risk-free rate | 2.52% |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities - Narrative (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Fair Value Disclosures [Abstract] | |
Assets, fair value | $ 0 |
Total rents | Customer concentration | Tenant | |
Fair value of assets and liabilities | |
Concentration risk, percent | 22.70% |
Fair Value of Assets and Liab_4
Fair Value of Assets and Liabilities - Schedule of Fair Value and Carrying Value of Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Principal Balance | ||
Fair value of financial instruments | ||
Senior unsecured debt and mortgage note payable | $ 25,719 | $ 276,000 |
Fair Value | ||
Fair value of financial instruments | ||
Senior unsecured debt and mortgage note payable | $ 26,588 | $ 283,214 |
Earnings Per Common Share - Sch
Earnings Per Common Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Numerator for earnings per common share - basic: | |||||
Net income | $ 242,377 | $ 37,047 | $ 452,974 | $ 224,709 | |
Net income attributable to noncontrolling interest | (91) | (14) | (170) | (77) | |
Preferred distributions | (1,997) | (1,997) | (3,994) | (3,994) | |
Net income attributable to Equity Commonwealth common shareholders | 240,289 | 35,036 | 448,810 | 220,638 | |
Numerator for earnings per common share - diluted: | |||||
Net income | 242,377 | 37,047 | 452,974 | 224,709 | |
Net income attributable to noncontrolling interests | (91) | (14) | (170) | (77) | |
Distributed Earnings | 0 | (1,997) | 0 | 0 | |
Numerator for net income per share - diluted | $ 242,286 | $ 35,036 | $ 452,804 | $ 224,632 | |
Denominator for earnings per common share - basic and diluted: | |||||
Weighted average number of common shares outstanding — basic (in shares) | 122,122 | 121,822 | 122,041 | 122,839 | |
Weighted average number of common shares outstanding — diluted (in shares) | 125,862 | 122,649 | 125,841 | 126,027 | |
Net income per common share attributable to Equity Commonwealth common shareholders: | |||||
Basic (in dollars per share) | $ 1.97 | $ 0.29 | $ 3.68 | $ 1.80 | |
Diluted (in dollars per share) | $ 1.93 | $ 0.29 | $ 3.60 | $ 1.78 | |
Series D | |||||
Anti-dilutive securities: | |||||
Effect of anti-dilutive securities (in shares) | 0 | 2,363 | 0 | 0 | |
LTIP Units | |||||
Anti-dilutive securities: | |||||
Effect of anti-dilutive securities (in shares) | 32 | 42 | 34 | 42 | |
OP Units | |||||
Anti-dilutive securities: | |||||
Effect of anti-dilutive securities (in shares) | 14 | 1 | 12 | 1 | |
RSUs | |||||
Denominator for earnings per common share - basic and diluted: | |||||
Weighted average number of common shares outstanding, dilutive adjustment (in shares) | 1,005 | 762 | 1,064 | 746 | |
LTIP Units | |||||
Denominator for earnings per common share - basic and diluted: | |||||
Weighted average number of common shares outstanding, dilutive adjustment (in shares) | 172 | 65 | 173 | 79 | |
Series D | |||||
Denominator for earnings per common share - basic and diluted: | |||||
Series D preferred shares; 6 1/2% cumulative convertible (in shares) | 2,563 | 0 | 2,563 | 2,363 | |
Anti-dilutive securities: | |||||
Preferred shares, dividend yield | 6.50% | 6.50% | 6.50% | 6.50% | 6.50% |
Earnings Per Common Share - S_2
Earnings Per Common Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Footnote) (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Weighted average number of shares, restricted stock units, unvested (in shares) | 220 | 362 | 203 | 335 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 6 Months Ended |
Jun. 30, 2019segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Percentage of revenue from office properties (more than) | 90.00% |
Related Person Transactions - N
Related Person Transactions - Narrative (Details) - Two North Riverside Plaza Joint Venture Limited Partnership $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($)option | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)option | Jun. 30, 2018USD ($) | |
Related Party Transaction [Line Items] | ||||
Lease term | 5 years | 5 years | ||
Number of renewal options of lease arrangement | option | 1 | 1 | ||
Renewal term of lease arrangement | 5 years | 5 years | ||
Tenant improvements | $ 0.7 | $ 0.7 | ||
Lease termination period term | 30 days | |||
Operating lease, expense | $ 0.3 | $ 0.2 | $ 0.5 | $ 0.4 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - Series D - $ / shares | Aug. 15, 2019 | Jul. 12, 2019 | May 15, 2019 | Apr. 11, 2019 | Feb. 15, 2019 | Jan. 11, 2019 |
Subsequent Event [Line Items] | ||||||
Dividend declared (in dollars per share) | $ 0.40625 | $ 0.40625 | ||||
Dividend paid (in dollars per share) | $ 0.40625 | $ 0.40625 | ||||
Subsequent event | ||||||
Subsequent Event [Line Items] | ||||||
Dividend declared (in dollars per share) | $ 0.40625 | |||||
Scenario, Forecast | ||||||
Subsequent Event [Line Items] | ||||||
Dividend paid (in dollars per share) | $ 0.40625 |
Uncategorized Items - eqc630191
Label | Element | Value |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,902,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 1,902,000 |