Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 05, 2024 | Jun. 30, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
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 2000 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2.2 | ||
Entity Common Stock, Shares Outstanding (in shares) | 106,991,322 | ||
Documents Incorporated by Reference | Certain Information required by Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K is incorporated herein by reference to the definitive Proxy Statement for the 2024 Annual Meeting of Shareholders, or the definitive Proxy Statement, which Equity Commonwealth intends to file no later than 120 days after the end of its fiscal year ended December 31, 2023. | ||
Entity Central Index Key | 0000803649 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
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 | ||
6.50% Series D Cumulative Convertible Preferred Shares of Beneficial Interest | |||
Document Information [Line Items] | |||
Title of 12(b) Security | 6.50% Series D Cumulative Convertible Preferred Shares of Beneficial Interest | ||
Trading Symbol | EQCpD | ||
Security Exchange Name | NYSE |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Firm ID | 42 |
Auditor Location | Chicago, Illinois |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Real estate properties: | ||
Land | $ 44,060 | $ 44,060 |
Buildings and improvements | 367,827 | 364,063 |
Total real estate properties, at cost, gross | 411,887 | 408,123 |
Accumulated depreciation | (180,535) | (169,530) |
Total real estate properties, at cost, net | 231,352 | 238,593 |
Cash and cash equivalents | 2,160,535 | 2,582,222 |
Rents receivable | 15,737 | 16,009 |
Other assets, net | 17,417 | 18,061 |
Total assets | 2,425,041 | 2,854,885 |
LIABILITIES AND EQUITY | ||
Accounts payable, accrued expenses and other | 27,298 | 25,935 |
Rent collected in advance | 1,990 | 2,355 |
Distributions payable | 5,640 | 2,863 |
Total liabilities | 34,928 | 31,153 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Series D preferred shares; 6.50% cumulative convertible; 4,915,196 shares issued and outstanding, aggregate liquidation preference of $122,880 | 119,263 | 119,263 |
Common shares of beneficial interest, $0.01 par value: 350,000,000 shares authorized; 106,847,438 and 109,428,252 shares issued and outstanding, respectively | 1,068 | 1,094 |
Additional paid in capital | 3,935,873 | 3,979,566 |
Cumulative net income | 3,926,979 | 3,835,815 |
Cumulative common distributions | (4,864,440) | (4,393,522) |
Cumulative preferred distributions | (733,676) | (725,688) |
Total shareholders’ equity | 2,385,067 | 2,816,528 |
Noncontrolling interest | 5,046 | 7,204 |
Total equity | 2,390,113 | 2,823,732 |
Total liabilities and equity | $ 2,425,041 | $ 2,854,885 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Financial Position [Abstract] | ||
Preferred shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred shares of beneficial interest, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred shares, dividend yield | 6.50% | 6.50% |
Preferred shares of beneficial interest, shares issued (in shares) | 4,915,196 | 4,915,196 |
Preferred shares, of beneficial interest, shares outstanding (in shares) | 4,915,196 | 4,915,196 |
Preferred shares, aggregate liquidation preference | $ 122,880 | $ 122,880 |
Common shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares of beneficial interest, shares authorized (in shares) | 350,000,000 | 350,000,000 |
Common shares of beneficial interest, shares issued (in shares) | 106,847,438 | 109,428,252 |
Common shares of beneficial interest, shares outstanding (in shares) | 106,847,438 | 109,428,252 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues: | |||
Rental revenue | $ 55,336 | $ 58,763 | $ 54,927 |
Other revenue | 5,188 | 4,377 | 3,075 |
Total revenues | 60,524 | 63,140 | 58,002 |
Expenses: | |||
Operating expenses | 27,462 | 24,184 | 25,893 |
Depreciation and amortization | 17,444 | 17,810 | 17,774 |
General and administrative | 36,974 | 30,378 | 37,444 |
Total expenses | 81,880 | 72,372 | 81,111 |
Interest and other income, net | 114,667 | 46,945 | 6,800 |
Gain on sale of properties, net | 0 | 97 | 0 |
Income (loss) before income taxes | 93,311 | 37,810 | (16,309) |
Income tax expense | (1,866) | (453) | (120) |
Net income (loss) | 91,445 | 37,357 | (16,429) |
Net (income) loss attributable to noncontrolling interest | (281) | (94) | 33 |
Net income (loss) attributable to Equity Commonwealth | 91,164 | 37,263 | (16,396) |
Preferred distributions | (7,988) | (7,988) | (7,988) |
Net income (loss) attributable to Equity Commonwealth common shareholders | $ 83,176 | $ 29,275 | $ (24,384) |
Weighted average common shares outstanding — basic (in shares) | 108,841 | 111,674 | 121,411 |
Weighted average common shares outstanding — diluted (in shares) | 110,185 | 112,825 | 121,411 |
Earnings per common share attributable to Equity Commonwealth common shareholders: | |||
Basic (in dollars per share) | $ 0.76 | $ 0.26 | $ (0.20) |
Diluted (in dollars per share) | $ 0.75 | $ 0.26 | $ (0.20) |
CONSLIDATED STATEMENTS OF EQUIT
CONSLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Series D Preferred Shares | Common Shares | Additional Paid in Capital | Cumulative Net Income | Cumulative Common Distributions | Cumulative Preferred Distributions | Noncontrolling Interest |
Beginning balance (in shares) at Dec. 31, 2020 | 4,915,196 | 121,522,555 | ||||||
Beginning balance at Dec. 31, 2020 | $ 3,243,164 | $ 119,263 | $ 1,215 | $ 4,294,632 | $ 3,814,948 | $ (4,283,668) | $ (709,712) | $ 6,486 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | (16,429) | (16,396) | (33) | |||||
Repurchase of shares (in shares) | (6,735,810) | |||||||
Repurchase of shares | (174,407) | $ (67) | (174,340) | |||||
Surrender of shares for tax withholding (in shares) | (245,560) | |||||||
Surrender of shares for tax withholding | (7,081) | $ (2) | (7,079) | |||||
Share-based compensation (in shares) | 664,633 | |||||||
Share-based compensation | 15,442 | $ 6 | 14,555 | 881 | ||||
Distributions | (5,419) | 2,473 | (7,988) | 96 | ||||
Adjustment for noncontrolling interest | 888 | (888) | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 4,915,196 | 115,205,818 | ||||||
Ending balance at Dec. 31, 2021 | 3,055,270 | $ 119,263 | $ 1,152 | 4,128,656 | 3,798,552 | (4,281,195) | (717,700) | 6,542 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 37,357 | 37,263 | 94 | |||||
Repurchase of shares (in shares) | (6,110,646) | |||||||
Repurchase of shares | (155,710) | $ (61) | (155,649) | |||||
Surrender of shares for tax withholding (in shares) | (160,506) | |||||||
Surrender of shares for tax withholding | (4,160) | $ (2) | (4,158) | |||||
Share-based compensation (in shares) | 493,586 | |||||||
Share-based compensation | 11,939 | $ 5 | 10,455 | 1,479 | ||||
Distributions | (120,965) | (112,327) | (7,988) | (650) | ||||
Adjustment for noncontrolling interest | 262 | (262) | ||||||
Contributions | 1 | 1 | ||||||
Ending balance (in shares) at Dec. 31, 2022 | 4,915,196 | 109,428,252 | ||||||
Ending balance at Dec. 31, 2022 | 2,823,732 | $ 119,263 | $ 1,094 | 3,979,566 | 3,835,815 | (4,393,522) | (725,688) | 7,204 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 91,445 | 91,164 | 281 | |||||
Repurchase of shares (in shares) | (3,018,411) | |||||||
Repurchase of shares | (56,803) | $ (30) | (56,773) | |||||
Surrender of shares for tax withholding (in shares) | (134,193) | |||||||
Surrender of shares for tax withholding | (3,395) | $ (1) | (3,394) | |||||
Share-based compensation (in shares) | 436,398 | |||||||
Share-based compensation | 15,977 | $ 4 | 13,255 | 2,718 | ||||
Distributions | (480,843) | (470,918) | (7,988) | (1,937) | ||||
Adjustment for noncontrolling interest | 648 | (648) | ||||||
OP unit redemption (in shares) | 135,392 | |||||||
OP Unit redemption | 0 | $ 1 | 2,571 | (2,572) | ||||
Ending balance (in shares) at Dec. 31, 2023 | 4,915,196 | 106,847,438 | ||||||
Ending balance at Dec. 31, 2023 | $ 2,390,113 | $ 119,263 | $ 1,068 | $ 3,935,873 | $ 3,926,979 | $ (4,864,440) | $ (733,676) | $ 5,046 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 91,445 | $ 37,357 | $ (16,429) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation | 14,914 | 15,230 | 15,235 |
Straight-line rental income | (93) | 238 | (1,407) |
Other amortization | 2,530 | 2,580 | 2,539 |
Share-based compensation | 15,977 | 11,939 | 15,442 |
Net gain on sale of properties | 0 | (97) | 0 |
Change in assets and liabilities: | |||
Rents receivable and other assets | (1,739) | (6,089) | 81 |
Accounts payable, accrued expenses and other | (401) | 5,513 | (410) |
Rent collected in advance | (365) | (1,631) | 1,058 |
Net cash provided by operating activities | 122,268 | 65,040 | 16,109 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Real estate improvements | (5,691) | (3,577) | (6,803) |
Proceeds from sale of properties, net | 0 | 97 | 0 |
Net cash used in investing activities | (5,691) | (3,480) | (6,803) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Repurchase and retirement of common shares | (60,198) | (159,870) | (181,488) |
Contributions from holders of noncontrolling interest | 0 | 1 | 0 |
Distributions to common shareholders | (468,232) | (112,199) | (6,024) |
Distributions to preferred shareholders | (7,988) | (7,988) | (7,988) |
Distributions to holders of noncontrolling interest | (1,846) | (280) | (33) |
Net cash used in financing activities | (538,264) | (280,336) | (195,533) |
Decrease in cash and cash equivalents | (421,687) | (218,776) | (186,227) |
Cash and cash equivalents at beginning of year | 2,582,222 | 2,800,998 | 2,987,225 |
Cash and cash equivalents at end of year | 2,160,535 | 2,582,222 | 2,800,998 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Taxes paid, net | 1,946 | 456 | 246 |
NON-CASH INVESTING ACTIVITIES: | |||
Accrued capital expenditures | 2,881 | 934 | 509 |
NON-CASH FINANCING ACTIVITIES: | |||
Distributions payable | 5,640 | 2,863 | 2,365 |
OP Unit redemption | $ 2,572 | $ 0 | $ 0 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization 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. The Company operates in an umbrella partnership real estate investment trust, or UPREIT, and conducts substantially all of its activities through EQC Operating Trust, a Maryland real estate investment trust, or the Operating Trust. The Company beneficially owned, 99.79% of the outstanding shares of beneficial interest, designated as units, in the Operating Trust, or OP Units, as of December 31, 2023, 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. As of December 31, 2023, our portfolio consisted of four properties (eight buildings), with a combined 1.5 million square feet, and we had $2.2 billion of cash and cash equivalents. All numbers of properties, numbers of buildings and square feet are unaudited. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation. The consolidated financial statements include our investments in 100% owned subsidiaries and majority owned subsidiaries that are controlled by us. References to we, us, our and the Company, refer to Equity Commonwealth and its consolidated subsidiaries as of December 31, 2023, unless the context indicates otherwise. All intercompany transactions and balances have been eliminated. Dollar amounts presented may be approximate. Share amounts are presented in whole numbers, except where noted. Real Estate Properties. We record real estate properties at cost. We depreciate real estate investments on a straight-line basis over estimated useful lives of up to 40 years for buildings and improvements, and up to 12 years for personal property. Each time we enter into a new lease, or materially modify an existing lease, we evaluate its classification as either a finance or operating lease. The classification of a lease as finance or operating affects the carrying value of a property, as well as our recognition of rental payments as revenue. These evaluations require us to make estimates of, among other things, the remaining useful life and fair market value of a leased property, appropriate discount rates and future cash flows. We allocate the consideration paid for our properties among land, buildings and improvements and, for properties that qualify as acquired businesses under the Business Combinations Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, to identified intangible assets and liabilities, consisting of the value of above market and below market leases, the value of acquired in place leases and the value of tenant relationships. Purchase price allocations and the determination of useful lives are based on our estimates and, under some circumstances, studies from independent real estate appraisal firms to provide market information and evaluations that are relevant to our purchase price allocations and determinations of useful lives; however, we are ultimately responsible for the purchase price allocations and determination of useful lives. We allocate the consideration to land, buildings and improvements based on a determination of the fair values of these assets assuming the property is vacant. We determine the fair value of a property using methods that we believe are similar to those used by independent appraisers. Purchase price allocations for above market and below market leases are based on the estimated present value (using an interest rate which reflects our assessment of the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the acquired in place leases and (2) our estimate of fair market lease rates for the corresponding leases, measured over a period equal to the remaining non-cancelable terms of the respective leases. Purchase price allocations to acquired in place leases and tenant relationships are determined as the excess of (1) the purchase price paid for a property after adjusting existing in place leases to estimated market rental rates over (2) the estimated fair value of the property as if vacant. We aggregate this value between acquired in place lease values and tenant relationships based on our evaluation of the specific characteristics of each tenant's lease; however, the value of tenant relationships has not been separated from acquired in place lease value for our properties because we believe such value and related amortization expense is immaterial for acquisitions reflected in our historical financial statements. We consider certain factors in performing these analyses including estimates of carrying costs during the expected lease up periods, including real estate taxes, insurance and other operating income and expenses and costs to execute similar leases in current market conditions, such as leasing commissions, legal and other related costs. If we believe the value of tenant relationships is material in the future, those amounts will be separately allocated and amortized over the estimated lives of the relationships. We recognize the excess, if any, of the consideration paid over amounts allocated to land, buildings and improvements and identified intangible assets and liabilities as goodwill and we recognize gains if amounts allocated exceed the consideration paid. We amortize capitalized above market lease values as a reduction to rental income over the remaining terms of the respective leases. We amortize capitalized below market lease values as an increase to rental income over the remaining terms of the respective leases. We amortize the value of acquired in place leases exclusive of the value of above market and below market acquired in place leases to expense over the remaining terms of the respective leases. If a lease is terminated prior to its stated expiration, the unamortized lease intangibles relating to that lease is written off. We review our properties for impairment quarterly, or whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Impairment indicators may include our decision to dispose of an asset before the end of its estimated useful life, declining tenant occupancy, lack of progress releasing vacant space, tenant bankruptcies, low long-term prospects for improvement in property performance, weak or declining tenant profitability, and cash flow or liquidity. When indicators of potential impairment are present that suggest that the carrying amounts of real estate assets may not be recoverable, we assess the recoverability of these assets by determining whether the respective carrying values will be recovered through the estimated undiscounted future operating cash flows expected from the use of the assets and their eventual disposition. The determination of undiscounted cash flow includes consideration of many factors including income to be earned from the investment over our anticipated hold period, holding costs (exclusive of interest), estimated selling prices, and prevailing economic and market conditions. In the event that such expected undiscounted future cash flows do not exceed the carrying values, we estimate the fair value of the assets and record an impairment charge equal to the amount by which the carrying value exceeds the estimated fair value. Estimated fair values are calculated based on the following information, (i) recent third party estimates of market value, (ii) market prices for comparable properties, or (iii) the present value of future cash flows. During the years ended December 31, 2023, 2022 and 2021 we did not record any loss on asset impairment. When we classify properties as held for sale, we discontinue the recording of depreciation expense and estimate their fair value less costs to sell. If we determine that the carrying value for these properties exceed their estimated fair value less costs to sell, we record a loss on asset impairment. As of December 31, 2023 and 2022, we did not have any properties classified as held for sale. Certain of our real estate assets contain hazardous substances, including asbestos. We believe any asbestos in our buildings is contained in accordance with current regulations. If we remove the asbestos or renovate or demolish these properties, certain environmental regulations govern the manner in which the asbestos must be handled and removed. We do not believe that there are other environmental conditions or issues at any of our properties that have had or will have a material adverse effect on us. However, no assurances can be given that conditions or issues are not present at our properties or that costs we may be required to incur in the future to remediate contamination or comply with environmental, health and safety laws will not have a material adverse effect on our business or financial condition. As of December 31, 2023 and 2022, we did not have any accrued environmental remediation costs. Cash and Cash Equivalents. Our cash and cash equivalents consist of cash maintained in time deposits, depository accounts and money market accounts. We regularly monitor the credit ratings of the financial institutions holding our deposits to minimize our exposure to credit risk. Throughout the year, we have cash balances in excess of federally insured limits deposited with various financial institutions. We do not believe we are exposed to any significant credit risk on cash and cash equivalents. Other Assets, Net. Other assets consist principally of deferred leasing costs, capitalized lease incentives and prepaid property operating expenses. Deferred leasing costs are amortized on a straight-line basis over the terms of the respective leases. Capitalized lease incentives are amortized on a straight-line basis against rental income over the terms of the respective leases. Revenue Recognition. Rental revenue from operating leases, which includes rent concessions (including free rent and other lease incentives) and scheduled increases in rental rates during the lease term, represents the lease component and is recognized on a straight-line basis over the life of the lease agreements. We defer the recognition of contingent rental income, such as percentage rents, until the specific targets that trigger the contingent rental income are achieved. Rental revenue also includes non-lease components such as property level operating expenses reimbursed by our tenants and other incidental revenues, which are recorded as expenses are incurred. We concluded that the timing and pattern of transfer for non-lease components and the associated lease component are the same. We determined that the predominant component was the lease component and we have elected to account for and present the lease component and non-lease component of our leases as a single component in Rental revenue in our consolidated statements of operations in accordance with FASB Topic 842. Lessee Lease Classification . We classify leases as either finance or operating in accordance with FASB Topic 842, Leases. This classification determines whether the related expense is recognized based on an effective interest method for finance leases or on a straight-line basis over its life for operating leases. Additionally, lessees are required to record a right-of-use asset and lease liability for all leases with a term greater than 12 months. We have made an accounting policy election as permitted under ASC 842 to forgo recognition of a right-of-use asset and lease liability for short-term leases of less than 12 months. Earnings Per Common Share. Earnings per common share, or EPS, is computed using the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if our series D convertible preferred shares, our restricted share units, or RSUs, or beneficial interests in the Operating Trust, or LTIP Units, were converted into our common shares, which could result in a lower EPS amount. The effect of our series D convertible preferred shares on net income attributable to common shareholders is anti-dilutive for the years ended December 31, 2023, 2022 and 2021. Reclassifications. Reclassifications have been made to the prior years' financial statements and notes to conform to the current year's presentation. Legal Matters. We are or may become a party to various legal proceedings. We are not currently involved in any litigation nor, to our knowledge, is any litigation threatened against us where the outcome would, in our judgment based on information currently available to us, have a material adverse effect on the Company. Income Taxes. We are 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 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. The Income Taxes Topic of the FASB ASC prescribes how we should recognize, measure and present in our financial statements uncertain tax positions that have been taken or are expected to be taken in a tax return. Deferred tax assets are recognized to the extent that it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that has a greater than 50% likelihood of being realized upon settlement. We classify interest and penalties related to uncertain tax positions, if any, in our financial statements as a component of general and administrative expense. Use of Estimates. Preparation of these financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires us to make estimates and assumptions that may affect the amounts reported in these financial statements and related notes. The actual results could differ from these estimates. New Accounting Pronouncements. In November 2023, the FASB issued Accounting Standards Update, or ASU, 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves the disclosures about a public entity's reportable segments and addresses requests from investors for additional, more detailed information about a reportable segment's expenses. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We do not expect the adoption of ASU 2023-07 to have a material impact on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. This update is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. We do not expect the adoption of ASU 2023-09 to have a material impact on our consolidated financial statements. |
Real Estate Properties
Real Estate Properties | 12 Months Ended |
Dec. 31, 2023 | |
Real Estate [Abstract] | |
Real Estate Properties | Real Estate Properties Acquisitions and Expenditures We did not make any acquisitions during the years ended December 31, 2023, 2022 or 2021. During the years ended December 31, 2023, 2022, and 2021, we made improvements, excluding tenant-funded improvements, to our properties totaling $7.6 million, $4.0 million and $6.3 million, respectively. We committed $9.6 million for expenditures related to 0.2 million square feet of leases executed during 2023. Committed but unspent tenant related obligations are leasing commissions and tenant improvements. Based on existing leases as of December 31, 2023, committed but unspent tenant related obligations were $13.1 million. Property Dispositions: We did not sell any properties during the years ended December 31, 2023, 2022 or 2021. Lease Payments Our real estate properties are generally leased on gross lease and modified gross lease bases pursuant to non-cancelable, fixed term operating leases expiring between 2024 and 2035. These gross leases and modified gross leases require us to pay all or some property operating expenses and to provide all or some property management services. A portion of these property operating expenses are reimbursed by the tenants. The future minimum lease payments, excluding tenant reimbursement revenue, scheduled to be received by us during the current terms of our leases as of December 31, 2023 are as follows (in thousands): 2024 $ 34,544 2025 32,955 2026 30,033 2027 25,066 2028 20,031 Thereafter 46,434 $ 189,063 Rental revenue consists of the following (in thousands): December 31, 2023 2022 2021 Lease payments $ 36,008 $ 37,846 $ 36,461 Variable lease payments 19,328 20,917 18,466 Rental revenue $ 55,336 $ 58,763 $ 54,927 |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2023 | |
Other Assets [Abstract] | |
Other Assets | Other Assets Deferred Leasing Costs and Capitalized Lease Incentives The following table summarizes our deferred leasing costs and capitalized lease incentives as of December 31, 2023, and 2022 (in thousands): December 31, 2023 2022 Deferred leasing costs $ 21,356 $ 22,034 Accumulated amortization (10,540) (11,320) Deferred leasing costs, net $ 10,816 $ 10,714 Capitalized lease incentives $ 3,471 $ 3,352 Accumulated amortization (2,278) (1,873) Capitalized lease incentives, net $ 1,193 $ 1,479 Future amortization of deferred leasing costs, included in amortization expense, and capitalized lease incentives, included in rental revenues, to be recognized by us during the current terms of our leases as of December 31, 2023 are approximately (in thousands): Deferred Leasing Costs Capitalized Lease Incentives 2024 $ 2,548 $ 283 2025 1,833 222 2026 1,811 216 2027 1,411 170 2028 1,098 107 Thereafter 2,115 195 $ 10,816 $ 1,193 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Common Share Issuances: See Note 8 for information regarding equity issuances related to share-based compensation. Common Share Repurchases: On August 24, 2015, our Board of Trustees approved a common share repurchase program. On March 1, 2021, our Board of Trustees authorized the repurchase of up to $150.0 million of our outstanding common shares through June 30, 2022, and on December 14, 2021, our Board of Trustees authorized the repurchase of up to an additional $150.0 million of our outstanding common shares through December 31, 2022. On March 15, 2022, our Board of Trustees authorized the repurchase of up to $150.0 million of our outstanding common shares through June 30, 2023. On June 13, 2023, our Board of Trustees authorized the repurchase of up to $150.0 million of our outstanding common shares from July 1, 2023 through June 30, 2024. During the year ended December 31, 2023, we repurchased and retired 3,018,411 of our common shares at a weighted average price of $18.78 per share, for a total investment of $56.7 million. During the year ended December 31, 2022, we repurchased and retired 6,110,646 of our common shares at a weighted average dividend adjusted price of $24.64 per share, for a total investment of $155.5 million. During the year ended December 31, 2021, we repurchased and retired 6,735,810 of our common shares at a weighted average price of $25.85 per share, for a total investment of $174.1 million. The share repurchases in 2022 discussed in this paragraph were completed prior to the special, one-time cash distributions in that year, which was in the amount of $1.00 per common share/unit paid on October 18, 2022. As of December 31, 2023, we had $93.3 million of remaining availability under our share repurchase program, which expires on June 30, 2024. During the years ended December 31, 2023, 2022 and 2021, certain of our employees and former employees surrendered 134,193, 160,506 and 245,560 common shares owned by them, respectively, to satisfy their statutory tax withholding obligations in connection with the vesting of such common shares pursuant to our equity compensation plans. Common Share and Unit Distributions: On February 13, 2023, our Board of Trustees declared a special, one-time cash distribution of $4.25 per common share/unit to shareholders/unitholders of record on February 23, 2023. On March 9, 2023, we paid this distribution to such shareholders/unitholders in the aggregate amount of $468.3 million. On September 8, 2022, our Board of Trustees declared a special, one-time cash distribution of $1.00 per common share/unit to shareholders/unitholders of record on September 29, 2022. On October 18, 2022, we paid this distribution to such shareholders/unitholders in the aggregate amount of $111.0 million. In February 2023, 2022 and 2021, the number of earned awards for recipients of the Company’s restricted stock units and market-based LTIP Units granted in January 2020, 2019, and 2018, respectively, was determined. Pursuant to the terms of such awards, we paid one-time catch-up cash distributions to these recipients in the aggregate amounts of $1.8 million, $1.5 million, and $6.0 million, in February 2023, 2022, and 2021, respectively, for distributions to common shareholders and unitholders declared by our Board of Trustees during such awards’ performance measurement period. The following characterizes distributions paid per common share for the years ended December 31, 2023, 2022, and 2021: Year Ended December 31, 2023 2022 2021 Ordinary income 63.91 % 99.07 % — % Return of capital 36.09 % 0.93 % — % Capital gain — % — % — % Unrecaptured Section 1250 gain — % — % — % 100.00 % 100.00 % — % Series D Preferred Shares: Each of our 4,915,196 series D cumulative convertible preferred shares accrue dividends of $1.625, or 6.50% per annum of the liquidation amount, payable in equal quarterly payments. Our series D preferred shares are convertible, at the holder’s option, into our common shares at a conversion rate of 0.8204 common shares per series D preferred share, which is equivalent to a conversion price of $30.47 per common share, or 4,032,427 additional common shares at December 31, 2023. The conversion rate changed from 0.6846 to 0.8204 common shares per series D preferred share effective February 24, 2023 as a result of the common share distribution declared by our Board of Trustees in 2023. The conversion rate changed from 0.6585 to 0.6846 common shares per series D preferred share effective September 30, 2022 as a result of the common share distribution declared by our Board of Trustees in 2022. If our common shares trade at or above the then applicable conversion price, we may, at our option, convert some or all of the series D preferred shares into common shares at the then applicable conversion rate. If a fundamental change occurs, which generally will be deemed to occur upon a change in control or a termination of trading of our common shares (or other equity securities into which our series D preferred shares are then convertible), holders of our series D preferred shares will have a special right to convert their series D preferred shares into a number of our common shares per $25.00 liquidation preference, plus accrued and unpaid distributions, divided by 98% of the average closing market price of our common shares for a specified period before such event is effective, unless we exercise our right to repurchase these series D preferred shares for cash, at a purchase price equal to 100% of their liquidation preference, plus accrued and unpaid distributions. The issuance of a large number of common shares as a result of the exercise of this conversion right after a fundamental change may have a dilutive effect on net income attributable to Equity Commonwealth common shareholders per share for future periods. As of December 31, 2023, we had 4,915,196 outstanding series D preferred shares that were convertible into 4,032,427 of our common shares. Preferred Share Distributions: Under our governing documents and Maryland law, distributions to our shareholders are to be authorized and declared by our Board of Trustees. In 2023, our Board of Trustees declared distributions on our series D preferred shares to date as follows: Declaration Date Record Date Payment Date Dividend Per Share January 13, 2023 January 31, 2023 February 15, 2023 $ 0.40625 April 13, 2023 April 28, 2023 May 15, 2023 $ 0.40625 July 13, 2023 July 31, 2023 August 15, 2023 $ 0.40625 October 16, 2023 October 31, 2023 November 15, 2023 $ 0.40625 The following characterizes distributions paid per preferred share for the years ended December 31, 2023, 2022, and 2021: Year Ended December 31, 2023 2022 2021 Ordinary income 100.00 % 100.00 % — % Return of capital — % — % 100.00 % Capital gain — % — % — % Unrecaptured Section 1250 gain — % — % — % 100.0 % 100.0 % 100.00 % |
Noncontrolling Interest
Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2023 | |
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 has 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 December 31, 2023, the portion of the Operating Trust not beneficially owned by the Company is in the form of OP Units and LTIP Units (see Note 8 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 year ended December 31, 2023: Common Shares OP Units and LTIP Units Total Outstanding at January 1, 2023 109,428,252 279,892 109,708,144 Repurchase and surrender of shares (3,152,604) — (3,152,604) OP Unit redemption 135,392 (135,392) — Share-based compensation grants and vesting, net of forfeitures 436,398 81,518 517,916 Outstanding at December 31, 2023 106,847,438 226,018 107,073,456 Noncontrolling ownership interest in the Operating Trust 0.21 % 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 99.69%, 99.75% and 99.80%, respectively, for the years ended December 31, 2023, 2022 and 2021. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our provision for income taxes consists of the following (in thousands): Year Ended December 31, 2023 2022 2021 Current: State and local $ (50) $ (103) $ (120) Federal (1,816) (350) — Income tax expense $ (1,866) $ (453) $ (120) During the years ended December 31, 2023, 2022 and 2021, we recorded benefit of $0.1 million, $0.0 million and $0.1 million, respectively, related to uncertain tax positions, as part of our income tax provision. A reconciliation of our effective tax rate and the U.S. Federal statutory income tax rate is as follows: Year Ended December 31, 2023 2022 2021 Taxes at statutory U.S. federal income tax rate 21.00 % 21.00 % 21.00 % Dividends paid deduction and net operating loss utilization (21.00) % (21.00) % (21.00) % Federal taxes 1.95 % 0.93 % — % State and local income taxes 0.05 % 0.27 % (0.74) % Effective tax rate 2.00 % 1.20 % (0.74) % On November 30, 2023 and August 31, 2022, the Company completed internal restructurings intended to comply with Section 351 of the Internal Revenue Code. As a result, for the years ended December 31, 2023 and 2022, the Operating Trust recognized $200.0 million and $82.0 million taxable gains, respectively, for federal income tax purposes. The gains were distributed by the Company and have no impact on the Company’s provision for income taxes for the years ended December 31, 2023 and 2022. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Equity Commonwealth 2015 Omnibus Incentive Plan (2015 Incentive Plan) On June 16, 2015, at our 2015 annual meeting of shareholders, our shareholders approved the 2015 Incentive Plan. The 2015 Incentive Plan replaced the Equity Commonwealth 2012 Equity Compensation Plan (as amended, the 2012 Plan). The Board of Trustees approved the 2015 Incentive Plan, subject to shareholder approval, on March 18, 2015 (the Effective Date). On January 26, 2016, the Board of Trustees approved an amendment to the 2015 Incentive Plan to allow the Compensation Committee (Committee) to authorize in an award agreement a transfer of all or a part of certain equity awards not for value to a “family member” (as defined in the 2015 Incentive Plan). At our annual meeting of shareholders on June 20, 2019, our shareholders approved an amendment to the 2015 Incentive Plan to increase the number of common shares of beneficial interest authorized thereunder by 2,500,000 (hereafter, as amended, the 2015 Incentive Plan). At our annual meeting of shareholders on June 13, 2023, our shareholders approved an amendment to the 2015 Incentive Plan to increase the number of common shares of beneficial interest authorized thereunder by 1,650,000 The following description of certain terms of the 2015 Incentive Plan is qualified in all respects by the terms of the 2015 Incentive Plan. Eligibility. Awards may be granted under the 2015 Incentive Plan to employees, officers and non-employee directors of the Company, its subsidiaries or its affiliates, or consultants and advisors (who are natural persons) providing services to the Company, its subsidiaries or its affiliates, or any other person whose participation in the 2015 Incentive Plan is determined by the Committee to be in the best interests of the Company. Term . The 2015 Incentive Plan terminates automatically ten years after the Effective Date, unless it is terminated earlier by the Board of Trustees. Shares Available for Issuance. Subject to adjustment as provided in the 2015 Incentive Plan, the maximum number of common shares of the Company that are available for issuance under the 2015 Incentive Plan is 7,400,000 shares. Awards. The following types of awards may be made under the 2015 Incentive Plan, subject to limitations set forth in the 2015 Incentive Plan: · Stock options; · Stock appreciation rights; · Restricted stock; · Restricted stock units; · Unrestricted stock; · Dividend equivalent rights; · Performance shares and other performance-based awards; · Limited partnership interests in any partnership entity through which the Company may conduct its business in the future; · Other equity-based awards; and · Cash bonus awards. 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 service period determined by the Committee. 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 to 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 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, or LTIP Units. 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. Administration. The 2015 Incentive Plan will be administered by the Committee, which will determine all terms and recipients of awards under the 2015 Incentive Plan. 2023 Equity Award Activity On January 26, 2023, the Compensation Committee approved grants in the aggregate amount of 132,794 restricted shares and 269,609 RSUs at target (672,000 RSUs at maximum) to the Company’s officers, certain employees, and to Mr. Zell, the former Chairman of our Board of Trustees, as part of their compensation for fiscal year 2022. The restricted shares were valued at $25.61 per share, the closing price of our common shares on the New York Stock Exchange, or the NYSE, on the grant date. On June 13, 2023, in accordance with the Company’s compensation program for independent Trustees, the Committee awarded each of the six independent Trustees $0.1 million in restricted shares or time-based LTIP Units as part of their compensation for the 2023-2024 year of service on the Board of Trustees. These awards equated to 5,773 shares or time-based LTIP Units per Trustee, for a total of 28,865 shares and 5,773 time-based LTIP Units, valued at $20.79 per share and unit, the closing price of our common shares on the NYSE on that day. These shares and time-based LTIP Units vest one year after the date of the award, on June 13, 2024. During the year ended December 31, 2023, 274,739 RSUs vested, and, as a result, we issued 274,739 common shares, prior to certain employees surrendering their common shares to satisfy tax withholding obligations (see Note 5). 2022 Equity Award Activity On January 26, 2022, the Compensation Committee approved grants in the aggregate amount of 29,071 time-based LTIP Units, 59,024 market-based LTIP Units at target (147,117 market-based LTIP Units at maximum) 92,573 restricted shares and 187,951 RSUs at target (468,468 RSUs at maximum) to the Company’s officers, certain employees, and to Mr. Zell, the former Chairman of our Board of Trustees, as part of their compensation for fiscal year 2021. The restricted shares and time-based LTIP Units were valued at $25.50 per share/unit, the closing price of our common shares on the NYSE, on the grant date. On June 21, 2022, in accordance with the Company’s compensation program for independent Trustees, the Committee awarded each of the six independent Trustees $0.1 million in restricted shares or time-based LTIP Units as part of their compensation for the 2022-2023 year of service on the Board of Trustees. These awards equated to 3,604 shares or time-based LTIP Units per Trustee, for a total of 18,020 shares and 3,604 time-based LTIP Units, valued at $27.75 per share and unit, the closing price of our common shares on the NYSE on that day. These shares and time-based LTIP Units vested on June 21, 2023. During the year ended December 31, 2022, 382,993 RSUs vested, and, as a result, we issued 382,993 common shares, prior to certain employees surrendering their common shares to satisfy tax withholding obligations (see Note 5). 2021 Equity Award Activity On January 25, 2021, the Committee approved grants in the aggregate amount of 122,466 restricted shares and 248,646 RSUs at target (619,750 RSUs at maximum) to the Company’s officers, certain employees, and to Mr. Zell, the former Chairman of our Board of Trustees, as part of their compensation for fiscal year 2020. The restricted shares were valued at $28.25 per share, the closing price of our common shares on the NYSE on the grant date. On June 23, 2021, in accordance with the Company’s compensation plan for independent Trustees, the Committee awarded each of the six independent Trustees $0.1 million in restricted shares or time-based LTIP Units as part of their compensation for the 2021-2022 year of service on the Board of Trustees. These awards equated to 3,701 shares or time-based LTIP Units per Trustee, for a total of 18,505 shares and 3,701 time-based LTIP Units, valued at $27.02 per share and unit, the closing price of our common shares on the New York Stock Exchange, or NYSE, on that day. These shares and time-based LTIP Units vested on June 23, 2022. During the year ended December 31, 2021, 523,662 RSUs vested, and, as a result, we issued 523,662 common shares, prior to certain employees surrendering their common shares to satisfy tax withholding obligations (see Note 5). Additionally, 81,434 market-based LTIP Units vested and converted into OP Units. Outstanding Equity Awards The table below presents a summary of restricted share, RSU and LTIP Unit activity for the years ended December 31, 2023, 2022 and 2021: Number Weighted Number Weighted Outstanding at December 31, 2020 385,688 $ 31.52 1,964,918 $ 15.65 Granted 144,672 28.06 619,750 15.19 Vested (188,990) 30.99 (605,096) 15.31 Not earned (1) — — — — Forfeited — — — — Outstanding at December 31, 2021 341,370 $ 30.35 1,979,572 $ 15.61 Granted 143,268 25.84 615,585 14.09 Vested (125,958) 30.15 (382,993) 15.46 Not earned (1) — — (358,692) 15.91 Forfeited — — — — Outstanding at December 31, 2022 358,680 $ 28.62 1,853,472 $ 15.13 Granted 167,432 24.61 672,000 14.65 Vested (195,521) 29.07 (350,484) 16.07 Not earned (1) — — (136,212) 16.12 Forfeited — — — — Outstanding at December 31, 2023 330,591 $ 26.32 2,038,776 $ 14.74 (1) The table presents the maximum number of shares issued or issuable from outstanding equity awards. RSUs and market-based LTIP Units not earned are the shares market-based award recipients do not receive based on the performance measurement completed at the end of the performance period. The 330,591 unvested restricted shares and time-based LTIP Units as of December 31, 2023 are scheduled to vest as follows: 113,107 shares/units in 2024, 90,554 shares/units in 2025, 73,427 shares/units in 2026 and 53,503 shares/units in 2027. As of December 31, 2023, the estimated future compensation expense for all unvested restricted shares and time-based LTIP Units was $4.3 million. Compensation expense for the restricted share and time-based LTIP Units 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 2.3 years. As of December 31, 2023, the estimated future compensation expense for all unvested RSUs and market-based LTIP Units was $9.7 million. The weighted average period over which the future compensation expense will be recorded for the RSUs and market-based LTIP Units is approximately 2.2 years. The assumptions and fair values for the RSUs and market-based LTIP Units granted for the years ended December 31, 2023, 2022 and 2021 are included in the following table on a per share and unit basis. 2023 2022 2021 Fair value of RSUs and market-based LTIP Units granted at the target amount $ 36.51 $ 35.11 $ 37.87 Fair value of RSUs and market-based LTIP Units granted at the maximum amount $ 14.65 $ 14.09 $ 15.19 Expected term (years) 4 4 4 Expected volatility 18.47 % 17.04 % 16.99 % Expected dividend yield — % — % — % Risk-free rate 3.84 % 1.39 % 0.17 % During the years ended December 31, 2023, 2022 and 2021, we recorded $16.0 million, $11.9 million and $15.4 million, respectively, of compensation expense, net of forfeitures, in general and administrative expense for grants to our trustees, employees and an eligible consultant related to our equity compensation plans. Compensation expense recorded during the years ended December 31, 2023, 2022 and 2021 includes $5.2 million, $0.4 million and $3.5 million, respectively, of accelerated vesting due to the passing of our former Chairman in 2023 and staffing reductions in 2022 and 2021. Forfeitures are recognized as they occur. At December 31, 2023, 2,073,350 shares/units remain available for issuance under the 2015 Incentive Plan. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities As of December 31, 2023 and 2022, we do not have any assets or liabilities measured at fair value. Financial Instruments Our financial instruments include our cash and cash equivalents. At December 31, 2023 and 2022, the fair value of these financial instruments was not different from their carrying values. |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2023 | |
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): Year Ended December 31, 2023 2022 2021 Numerator for earnings per common share - basic: Net income (loss) $ 91,445 $ 37,357 $ (16,429) Net (income) loss attributable to noncontrolling interest (281) (94) 33 Preferred distributions (7,988) (7,988) (7,988) Numerator for net income (loss) per share - basic $ 83,176 $ 29,275 $ (24,384) Numerator for earnings per common share - diluted: Net income (loss) $ 91,445 $ 37,357 $ (16,429) Net (income) loss attributable to noncontrolling interest (281) (94) 33 Preferred distributions (7,988) (7,988) (7,988) Numerator for net income (loss) per share - diluted $ 83,176 $ 29,275 $ (24,384) Denominator for earnings per common share - basic and diluted: Weighted average number of common shares outstanding - basic (1) 108,841 111,674 121,411 RSUs (2) 1,224 970 — LTIP Units (3) 120 181 — Weighted average number of common shares outstanding - diluted 110,185 112,825 121,411 Net income (loss) per common share attributable to Equity Commonwealth common shareholders: Basic $ 0.76 $ 0.26 $ (0.20) Diluted $ 0.75 $ 0.26 $ (0.20) Anti-dilutive securities (4) : Effect of Series D preferred shares; 6.50% cumulative convertible 4,032 3,365 3,237 Effect of RSUs (2) — — 549 Effect of LTIP Units (3) — — 47 Effect of OP Units and time-based LTIP Units (5) 335 276 245 (1) The years ended December 31, 2023, 2022 and 2021, include 127, 105, and 256 weighted-average, unvested, earned RSUs, respectively. (2) Represents the weighted-average number of common shares that would have been issued if the year-end was the measurement date for unvested, unearned RSUs. (3) Represents the weighted-average dilutive shares issuable from market-based LTIP Units if the year-end was the measurement date for the periods shown. (4) These securities are excluded from the diluted earnings per share calculation for one or more of the years presented because including them results in anti-dilution. (5) Beneficial interests in the Operating Trust. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2023 | |
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. One hundred percent of our revenues for the year ended December 31, 2023 were from office properties. |
Related Person Transactions
Related Person Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions The following discussion includes a description of our related person transactions for the years ended December 31, 2023, 2022 and 2021. We lease office space for our corporate headquarters from Two North Riverside Plaza Joint Venture Limited Partnership, an entity associated with Equity Group Investments (EGI), a private entrepreneurial investment firm founded by Sam Zell, our former Chairman who passed away on May 18, 2023. Messrs. Helfand and Weinberg continue to be advisors to EGI and certain other members of our team are expected to continue to have limited involvement in its activities. In December 2020, we entered into an amendment to a July 2015 lease with Two North Riverside Plaza Joint Venture Limited Partnership to occupy office space on the twentieth and twenty-first floors of Two North Riverside Plaza in Chicago, Illinois (Two North Office Lease). The amendment extended the lease term for one year, through December 31, 2021, with no renewal options. The lease payment for the extended term was $0.3 million. In December 2021, we entered into a second amendment to the Two North Office Lease, extending the lease term for one year, through December 31, 2022, with no renewal options. The lease payment for the second extended term was $0.4 million. In December 2022, we entered into a third amendment to the Two North Office Lease extending the lease term for one year, through December 31, 2023, with no renewal options. The lease payment for the third extended term was $0.4 million. In August 2023, we entered into a fourth amendment to the Two North Office Lease extending the lease term for one year, through December 31, 2024, with no renewal options and contracting square feet to the existing space on the twentieth floor. The lease payment for the fourth extended term is $0.4 million. During the years ended December 31, 2023, 2022 and 2021, we recognized expense of $0.4 million, $0.4 million and $0.3 million, respectively, pursuant to the Two North Office Lease. The future minimum lease payments scheduled to be paid by us during the term of this lease as of December 31, 2023 are $0.4 million in 2024. As of December 31, 2023 and 2022, we did not have any amounts due to Two North Riverside Plaza Joint Venture Limited Partnership pursuant to the Two North Office Lease. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Preferred Share Distribution On January 16, 2024, we announced that our Board of Trustees declared a dividend of $0.40625 per series D preferred share, which will be paid on February 15, 2024 to shareholders of record on January 31, 2024. |
SCHEDULE III REAL ESTATE AND AC
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION | 12 Months Ended |
Dec. 31, 2023 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
Schedule III Real Estate and Accumulated Depreciation | Initial Cost to Company Cost Amount Carried at Close of Period Property City State Land Buildings and Costs Impairment/Write Downs Land Buildings and Total(1) Accumulated Date Original 1225 Seventeenth Street Denver CO $ 22,400 $ 110,090 $ 48,374 $ (4,877) $ 22,400 $ 153,587 $ 175,987 $ 65,171 6/24/2009 1982 1250 H Street, NW Washington DC 5,975 53,778 22,316 (6,046) 5,975 70,048 76,023 41,761 6/23/1998 1992 206 East 9th Street Austin TX 7,900 38,533 9,952 (1,710) 7,900 46,775 54,675 14,003 5/31/2012 1984 Bridgepoint Square Austin TX 7,785 70,526 32,150 (5,259) 7,785 97,417 105,202 59,600 12/5/1997 1986;1996; $ 44,060 $ 272,927 $ 112,792 $ (17,892) $ 44,060 $ 367,827 $ 411,887 $ 180,535 Analysis of the carrying amount of real estate properties and accumulated depreciation: Real Estate Accumulated Balance at January 1, 2021 $ 401,710 $ 143,319 Additions 6,326 15,054 Disposals (1,934) (1,934) Balance at December 31, 2021 406,102 156,439 Additions 4,002 15,072 Disposals (1,981) (1,981) Balance at December 31, 2022 408,123 169,530 Additions 7,638 14,879 Disposals (3,874) (3,874) Balance at December 31, 2023 $ 411,887 $ 180,535 (1) Excludes value of real estate intangibles. Aggregate cost for federal income tax purposes is $545,860. (2) Depreciation is calculated using the straight-line method over estimated useful lives of up to 40 years for buildings and improvements and up to 12 years for personal property. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) Attributable to Parent | $ 91,164 | $ 37,263 | $ (16,396) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation. The consolidated financial statements include our investments in 100% owned subsidiaries and majority owned subsidiaries that are controlled by us. References to we, us, our and the Company, refer to Equity Commonwealth and its consolidated subsidiaries as of December 31, 2023, unless the context indicates otherwise. All intercompany transactions and balances have been eliminated. Dollar amounts presented may be approximate. Share amounts are presented in whole numbers, except where noted. |
Real Estate Properties | Real Estate Properties. We record real estate properties at cost. We depreciate real estate investments on a straight-line basis over estimated useful lives of up to 40 years for buildings and improvements, and up to 12 years for personal property. Each time we enter into a new lease, or materially modify an existing lease, we evaluate its classification as either a finance or operating lease. The classification of a lease as finance or operating affects the carrying value of a property, as well as our recognition of rental payments as revenue. These evaluations require us to make estimates of, among other things, the remaining useful life and fair market value of a leased property, appropriate discount rates and future cash flows. We allocate the consideration paid for our properties among land, buildings and improvements and, for properties that qualify as acquired businesses under the Business Combinations Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, to identified intangible assets and liabilities, consisting of the value of above market and below market leases, the value of acquired in place leases and the value of tenant relationships. Purchase price allocations and the determination of useful lives are based on our estimates and, under some circumstances, studies from independent real estate appraisal firms to provide market information and evaluations that are relevant to our purchase price allocations and determinations of useful lives; however, we are ultimately responsible for the purchase price allocations and determination of useful lives. We allocate the consideration to land, buildings and improvements based on a determination of the fair values of these assets assuming the property is vacant. We determine the fair value of a property using methods that we believe are similar to those used by independent appraisers. Purchase price allocations for above market and below market leases are based on the estimated present value (using an interest rate which reflects our assessment of the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the acquired in place leases and (2) our estimate of fair market lease rates for the corresponding leases, measured over a period equal to the remaining non-cancelable terms of the respective leases. Purchase price allocations to acquired in place leases and tenant relationships are determined as the excess of (1) the purchase price paid for a property after adjusting existing in place leases to estimated market rental rates over (2) the estimated fair value of the property as if vacant. We aggregate this value between acquired in place lease values and tenant relationships based on our evaluation of the specific characteristics of each tenant's lease; however, the value of tenant relationships has not been separated from acquired in place lease value for our properties because we believe such value and related amortization expense is immaterial for acquisitions reflected in our historical financial statements. We consider certain factors in performing these analyses including estimates of carrying costs during the expected lease up periods, including real estate taxes, insurance and other operating income and expenses and costs to execute similar leases in current market conditions, such as leasing commissions, legal and other related costs. If we believe the value of tenant relationships is material in the future, those amounts will be separately allocated and amortized over the estimated lives of the relationships. We recognize the excess, if any, of the consideration paid over amounts allocated to land, buildings and improvements and identified intangible assets and liabilities as goodwill and we recognize gains if amounts allocated exceed the consideration paid. We amortize capitalized above market lease values as a reduction to rental income over the remaining terms of the respective leases. We amortize capitalized below market lease values as an increase to rental income over the remaining terms of the respective leases. We amortize the value of acquired in place leases exclusive of the value of above market and below market acquired in place leases to expense over the remaining terms of the respective leases. If a lease is terminated prior to its stated expiration, the unamortized lease intangibles relating to that lease is written off. We review our properties for impairment quarterly, or whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Impairment indicators may include our decision to dispose of an asset before the end of its estimated useful life, declining tenant occupancy, lack of progress releasing vacant space, tenant bankruptcies, low long-term prospects for improvement in property performance, weak or declining tenant profitability, and cash flow or liquidity. When indicators of potential impairment are present that suggest that the carrying amounts of real estate assets may not be recoverable, we assess the recoverability of these assets by determining whether the respective carrying values will be recovered through the estimated undiscounted future operating cash flows expected from the use of the assets and their eventual disposition. The determination of undiscounted cash flow includes consideration of many factors including income to be earned from the investment over our anticipated hold period, holding costs (exclusive of interest), estimated selling prices, and prevailing economic and market conditions. In the event that such expected undiscounted future cash flows do not exceed the carrying values, we estimate the fair value of the assets and record an impairment charge equal to the amount by which the carrying value exceeds the estimated fair value. Estimated fair values are calculated based on the following information, (i) recent third party estimates of market value, (ii) market prices for comparable properties, or (iii) the present value of future cash flows. During the years ended December 31, 2023, 2022 and 2021 we did not record any loss on asset impairment. When we classify properties as held for sale, we discontinue the recording of depreciation expense and estimate their fair value less costs to sell. If we determine that the carrying value for these properties exceed their estimated fair value less costs to sell, we record a loss on asset impairment. As of December 31, 2023 and 2022, we did not have any properties classified as held for sale. |
Cash and Cash Equivalents | Cash and Cash Equivalents. |
Other Assets, Net | Other Assets, Net. |
Revenue Recognition | Revenue Recognition. Rental revenue from operating leases, which includes rent concessions (including free rent and other lease incentives) and scheduled increases in rental rates during the lease term, represents the lease component and is recognized on a straight-line basis over the life of the lease agreements. We defer the recognition of contingent rental income, such as percentage rents, until the specific targets that trigger the contingent rental income are achieved. Rental revenue also includes non-lease components such as property level operating expenses reimbursed by our tenants and other incidental revenues, which are recorded as expenses are incurred. We concluded that the timing and pattern of transfer for non-lease components and the associated lease component are the same. We determined that the predominant component was the lease component and we have elected to account for and present the lease component and non-lease component of our leases as a single component in Rental revenue in our consolidated statements of operations in accordance with FASB Topic 842. |
Lessee Lease Classification | Lessee Lease Classification |
Earnings Per Common Share | Earnings Per Common Share. |
Reclassifications | Reclassifications. Reclassifications have been made to the prior years' financial statements and notes to conform to the current year's presentation. |
Legal Matters | Legal Matters. We are or may become a party to various legal proceedings. We are not currently involved in any litigation nor, to our knowledge, is any litigation threatened against us where the outcome would, in our judgment based on information currently available to us, have a material adverse effect on the Company. |
Income Taxes | Income Taxes. We are 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 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. The Income Taxes Topic of the FASB ASC prescribes how we should recognize, measure and present in our financial statements uncertain tax positions that have been taken or are expected to be taken in a tax return. Deferred tax assets are recognized to the extent that it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that has a greater than 50% likelihood of being realized upon settlement. We classify interest and penalties related to uncertain tax positions, if any, in our financial statements as a component of general and administrative expense. |
Use of Estimates | Use of Estimates. Preparation of these financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires us to make estimates and assumptions that may affect the amounts reported in these financial statements and related notes. The actual results could differ from these estimates. |
New Accounting Pronouncements | New Accounting Pronouncements. In November 2023, the FASB issued Accounting Standards Update, or ASU, 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves the disclosures about a public entity's reportable segments and addresses requests from investors for additional, more detailed information about a reportable segment's expenses. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We do not expect the adoption of ASU 2023-07 to have a material impact on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. This update is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. We do not expect the adoption of ASU 2023-09 to have a material impact on our consolidated financial statements. |
Real Estate Properties (Tables)
Real Estate Properties (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Real Estate [Abstract] | |
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 December 31, 2023 are as follows (in thousands): 2024 $ 34,544 2025 32,955 2026 30,033 2027 25,066 2028 20,031 Thereafter 46,434 $ 189,063 |
Schedule of Rental Revenue | Rental revenue consists of the following (in thousands): December 31, 2023 2022 2021 Lease payments $ 36,008 $ 37,846 $ 36,461 Variable lease payments 19,328 20,917 18,466 Rental revenue $ 55,336 $ 58,763 $ 54,927 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Assets [Abstract] | |
Summary of Deferred Financing Fees, Deferred Leasing Costs and Capitalized Lease Incentives | The following table summarizes our deferred leasing costs and capitalized lease incentives as of December 31, 2023, and 2022 (in thousands): December 31, 2023 2022 Deferred leasing costs $ 21,356 $ 22,034 Accumulated amortization (10,540) (11,320) Deferred leasing costs, net $ 10,816 $ 10,714 Capitalized lease incentives $ 3,471 $ 3,352 Accumulated amortization (2,278) (1,873) Capitalized lease incentives, net $ 1,193 $ 1,479 |
Summary of Future Amortization of Deferred Leasing Costs and Capitalized Lease Incentives | Future amortization of deferred leasing costs, included in amortization expense, and capitalized lease incentives, included in rental revenues, to be recognized by us during the current terms of our leases as of December 31, 2023 are approximately (in thousands): Deferred Leasing Costs Capitalized Lease Incentives 2024 $ 2,548 $ 283 2025 1,833 222 2026 1,811 216 2027 1,411 170 2028 1,098 107 Thereafter 2,115 195 $ 10,816 $ 1,193 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Paid Distributions and Declared Distributions | The following characterizes distributions paid per common share for the years ended December 31, 2023, 2022, and 2021: Year Ended December 31, 2023 2022 2021 Ordinary income 63.91 % 99.07 % — % Return of capital 36.09 % 0.93 % — % Capital gain — % — % — % Unrecaptured Section 1250 gain — % — % — % 100.00 % 100.00 % — % Declaration Date Record Date Payment Date Dividend Per Share January 13, 2023 January 31, 2023 February 15, 2023 $ 0.40625 April 13, 2023 April 28, 2023 May 15, 2023 $ 0.40625 July 13, 2023 July 31, 2023 August 15, 2023 $ 0.40625 October 16, 2023 October 31, 2023 November 15, 2023 $ 0.40625 The following characterizes distributions paid per preferred share for the years ended December 31, 2023, 2022, and 2021: Year Ended December 31, 2023 2022 2021 Ordinary income 100.00 % 100.00 % — % Return of capital — % — % 100.00 % Capital gain — % — % — % Unrecaptured Section 1250 gain — % — % — % 100.0 % 100.0 % 100.00 % |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 year ended December 31, 2023: Common Shares OP Units and LTIP Units Total Outstanding at January 1, 2023 109,428,252 279,892 109,708,144 Repurchase and surrender of shares (3,152,604) — (3,152,604) OP Unit redemption 135,392 (135,392) — Share-based compensation grants and vesting, net of forfeitures 436,398 81,518 517,916 Outstanding at December 31, 2023 106,847,438 226,018 107,073,456 Noncontrolling ownership interest in the Operating Trust 0.21 % |
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 year ended December 31, 2023: Common Shares OP Units and LTIP Units Total Outstanding at January 1, 2023 109,428,252 279,892 109,708,144 Repurchase and surrender of shares (3,152,604) — (3,152,604) OP Unit redemption 135,392 (135,392) — Share-based compensation grants and vesting, net of forfeitures 436,398 81,518 517,916 Outstanding at December 31, 2023 106,847,438 226,018 107,073,456 Noncontrolling ownership interest in the Operating Trust 0.21 % The table below presents a summary of restricted share, RSU and LTIP Unit activity for the years ended December 31, 2023, 2022 and 2021: Number Weighted Number Weighted Outstanding at December 31, 2020 385,688 $ 31.52 1,964,918 $ 15.65 Granted 144,672 28.06 619,750 15.19 Vested (188,990) 30.99 (605,096) 15.31 Not earned (1) — — — — Forfeited — — — — Outstanding at December 31, 2021 341,370 $ 30.35 1,979,572 $ 15.61 Granted 143,268 25.84 615,585 14.09 Vested (125,958) 30.15 (382,993) 15.46 Not earned (1) — — (358,692) 15.91 Forfeited — — — — Outstanding at December 31, 2022 358,680 $ 28.62 1,853,472 $ 15.13 Granted 167,432 24.61 672,000 14.65 Vested (195,521) 29.07 (350,484) 16.07 Not earned (1) — — (136,212) 16.12 Forfeited — — — — Outstanding at December 31, 2023 330,591 $ 26.32 2,038,776 $ 14.74 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | Our provision for income taxes consists of the following (in thousands): Year Ended December 31, 2023 2022 2021 Current: State and local $ (50) $ (103) $ (120) Federal (1,816) (350) — Income tax expense $ (1,866) $ (453) $ (120) |
Schedule of Reconciliation of Effective Tax Rate and the U.S. Federal Statutory Income Tax Rate | A reconciliation of our effective tax rate and the U.S. Federal statutory income tax rate is as follows: Year Ended December 31, 2023 2022 2021 Taxes at statutory U.S. federal income tax rate 21.00 % 21.00 % 21.00 % Dividends paid deduction and net operating loss utilization (21.00) % (21.00) % (21.00) % Federal taxes 1.95 % 0.93 % — % State and local income taxes 0.05 % 0.27 % (0.74) % Effective tax rate 2.00 % 1.20 % (0.74) % |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Restricted Share and Restricted Stock Unit Activity | The following table presents the changes in Equity Commonwealth’s issued and outstanding common shares and units for the year ended December 31, 2023: Common Shares OP Units and LTIP Units Total Outstanding at January 1, 2023 109,428,252 279,892 109,708,144 Repurchase and surrender of shares (3,152,604) — (3,152,604) OP Unit redemption 135,392 (135,392) — Share-based compensation grants and vesting, net of forfeitures 436,398 81,518 517,916 Outstanding at December 31, 2023 106,847,438 226,018 107,073,456 Noncontrolling ownership interest in the Operating Trust 0.21 % The table below presents a summary of restricted share, RSU and LTIP Unit activity for the years ended December 31, 2023, 2022 and 2021: Number Weighted Number Weighted Outstanding at December 31, 2020 385,688 $ 31.52 1,964,918 $ 15.65 Granted 144,672 28.06 619,750 15.19 Vested (188,990) 30.99 (605,096) 15.31 Not earned (1) — — — — Forfeited — — — — Outstanding at December 31, 2021 341,370 $ 30.35 1,979,572 $ 15.61 Granted 143,268 25.84 615,585 14.09 Vested (125,958) 30.15 (382,993) 15.46 Not earned (1) — — (358,692) 15.91 Forfeited — — — — Outstanding at December 31, 2022 358,680 $ 28.62 1,853,472 $ 15.13 Granted 167,432 24.61 672,000 14.65 Vested (195,521) 29.07 (350,484) 16.07 Not earned (1) — — (136,212) 16.12 Forfeited — — — — Outstanding at December 31, 2023 330,591 $ 26.32 2,038,776 $ 14.74 |
Summary of Assumptions and Fair Values for Restricted Stock Units Granted in the Period | The assumptions and fair values for the RSUs and market-based LTIP Units granted for the years ended December 31, 2023, 2022 and 2021 are included in the following table on a per share and unit basis. 2023 2022 2021 Fair value of RSUs and market-based LTIP Units granted at the target amount $ 36.51 $ 35.11 $ 37.87 Fair value of RSUs and market-based LTIP Units granted at the maximum amount $ 14.65 $ 14.09 $ 15.19 Expected term (years) 4 4 4 Expected volatility 18.47 % 17.04 % 16.99 % Expected dividend yield — % — % — % Risk-free rate 3.84 % 1.39 % 0.17 % |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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): Year Ended December 31, 2023 2022 2021 Numerator for earnings per common share - basic: Net income (loss) $ 91,445 $ 37,357 $ (16,429) Net (income) loss attributable to noncontrolling interest (281) (94) 33 Preferred distributions (7,988) (7,988) (7,988) Numerator for net income (loss) per share - basic $ 83,176 $ 29,275 $ (24,384) Numerator for earnings per common share - diluted: Net income (loss) $ 91,445 $ 37,357 $ (16,429) Net (income) loss attributable to noncontrolling interest (281) (94) 33 Preferred distributions (7,988) (7,988) (7,988) Numerator for net income (loss) per share - diluted $ 83,176 $ 29,275 $ (24,384) Denominator for earnings per common share - basic and diluted: Weighted average number of common shares outstanding - basic (1) 108,841 111,674 121,411 RSUs (2) 1,224 970 — LTIP Units (3) 120 181 — Weighted average number of common shares outstanding - diluted 110,185 112,825 121,411 Net income (loss) per common share attributable to Equity Commonwealth common shareholders: Basic $ 0.76 $ 0.26 $ (0.20) Diluted $ 0.75 $ 0.26 $ (0.20) Anti-dilutive securities (4) : Effect of Series D preferred shares; 6.50% cumulative convertible 4,032 3,365 3,237 Effect of RSUs (2) — — 549 Effect of LTIP Units (3) — — 47 Effect of OP Units and time-based LTIP Units (5) 335 276 245 (1) The years ended December 31, 2023, 2022 and 2021, include 127, 105, and 256 weighted-average, unvested, earned RSUs, respectively. (2) Represents the weighted-average number of common shares that would have been issued if the year-end was the measurement date for unvested, unearned RSUs. (3) Represents the weighted-average dilutive shares issuable from market-based LTIP Units if the year-end was the measurement date for the periods shown. (4) These securities are excluded from the diluted earnings per share calculation for one or more of the years presented because including them results in anti-dilution. (5) Beneficial interests in the Operating Trust. |
Organization (Details)
Organization (Details) $ in Thousands, ft² in Millions | 12 Months Ended | |||
Dec. 31, 2023 USD ($) ft² property building | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Aug. 31, 2021 USD ($) | |
Segment Reporting Information [Line Items] | ||||
Cash and cash equivalents | $ 2,160,535 | $ 2,582,222 | ||
General and administrative | $ 36,974 | $ 30,378 | $ 37,444 | |
Monmouth Real Estate Investment Corporation | ||||
Segment Reporting Information [Line Items] | ||||
Business acquisition, transaction costs | $ 10,000 | |||
General and administrative | $ 100 | |||
Consolidated portfolio | ||||
Segment Reporting Information [Line Items] | ||||
Number of properties | property | 4 | |||
Number of buildings | building | 8 | |||
Property square feet (in sqft) | ft² | 1.5 | |||
EQC Operating Trust | ||||
Segment Reporting Information [Line Items] | ||||
Noncontrolling interest, ownership percentage by parent | 99.79% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||
Dec. 31, 2023 USD ($) property | Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Percentage of investments in subsidiaries | 100% | ||
Asset impairment charges | $ | $ 0 | $ 0 | $ 0 |
Minimum percentage of likelihood of realization of tax benefits (greater than) | 50% | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||
Property, Plant and Equipment [Line Items] | |||
Number of properties | property | 0 | 0 | |
Buildings and improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 40 years | ||
Personal property | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 12 years |
Real Estate Properties - Narrat
Real Estate Properties - Narrative (Details) ft² in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) ft² property | Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) property | |
Real Estate [Abstract] | |||
Real estate property improvements | $ 7.6 | $ 4 | $ 6.3 |
Committed expenditures on leases executed during period | $ 9.6 | ||
Square feet of leases committed for expenditures during the period (in sqft) | ft² | 0.2 | ||
Committed but unspent tenant related obligations based on existing leases | $ 13.1 | ||
Number of real estate properties sold | property | 0 | 0 | 0 |
Real Estate Properties - Schedu
Real Estate Properties - Schedule of Future Minimum Lease Payments, Excluding Tenant Reimbursement Revenue, Scheduled to be Received (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract] | |
2024 | $ 34,544 |
2025 | 32,955 |
2026 | 30,033 |
2027 | 25,066 |
2028 | 20,031 |
Thereafter | 46,434 |
Total | $ 189,063 |
Real Estate Properties - Rental
Real Estate Properties - Rental Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Real Estate [Abstract] | |||
Lease payments | $ 36,008 | $ 37,846 | $ 36,461 |
Variable lease payments | 19,328 | 20,917 | 18,466 |
Rental revenue | $ 55,336 | $ 58,763 | $ 54,927 |
Other Assets - Summary of Defer
Other Assets - Summary of Deferred Financing Fees, Deferred Leasing Costs and Capitalized Lease Incentives (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Other Assets [Abstract] | ||
Deferred leasing costs | $ 21,356 | $ 22,034 |
Accumulated amortization | (10,540) | (11,320) |
Deferred leasing costs, net | 10,816 | 10,714 |
Capitalized lease incentives | 3,471 | 3,352 |
Accumulated amortization | (2,278) | (1,873) |
Capitalized lease incentives, net | $ 1,193 | $ 1,479 |
Other Assets - Summary of Futur
Other Assets - Summary of Future Amortization of Deferred Leasing Costs and Capitalized Lease Incentives (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Leasing Costs | ||
2024 | $ 2,548 | |
2025 | 1,833 | |
2026 | 1,811 | |
2027 | 1,411 | |
2028 | 1,098 | |
Thereafter | 2,115 | |
Deferred leasing costs, net | 10,816 | $ 10,714 |
Capitalized Lease Incentives | ||
2024 | 283 | |
2025 | 222 | |
2026 | 216 | |
2027 | 170 | |
2028 | 107 | |
Thereafter | 195 | |
Capitalized lease incentives, net | $ 1,193 | $ 1,479 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||||||||||
Mar. 09, 2023 USD ($) | Feb. 13, 2023 $ / shares | Oct. 18, 2022 USD ($) $ / shares | Sep. 08, 2022 $ / shares | Oct. 20, 2020 $ / shares | Feb. 28, 2023 USD ($) | Feb. 28, 2022 USD ($) | Feb. 28, 2021 USD ($) | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Jul. 01, 2023 USD ($) | Sep. 29, 2022 | Mar. 15, 2022 USD ($) | Dec. 14, 2021 USD ($) | Mar. 01, 2021 USD ($) | Oct. 02, 2020 | Oct. 01, 2020 | |
Class of Stock [Line Items] | ||||||||||||||||||
Repurchase of shares | $ | $ 56,803 | $ 155,710 | $ 174,407 | |||||||||||||||
Distributions declared per common share (in dollars per share) | $ / shares | $ 4.25 | $ 1 | $ 1 | |||||||||||||||
Distributions paid per common share (in dollars per share) | $ / shares | $ 1 | $ 4.25 | ||||||||||||||||
Payments of capital distribution | $ | $ 468,300 | $ 111,000 | $ 1,800 | $ 1,500 | $ 6,000 | $ 468,232 | $ 112,199 | $ 6,024 | ||||||||||
Preferred shares, of beneficial interest, shares outstanding (in shares) | 4,915,196 | 4,915,196 | ||||||||||||||||
Preferred shares, dividend yield | 6.50% | 6.50% | ||||||||||||||||
Common Shares | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Stock repurchase program, authorized amount (up to) | $ | $ 150,000 | $ 150,000 | $ 150,000 | $ 150,000 | ||||||||||||||
Number of shares repurchased (in shares) | 6,110,646 | |||||||||||||||||
Average cost per share (in dollars per share) | $ / shares | $ 18.78 | $ 24.64 | $ 25.85 | |||||||||||||||
Repurchase of shares | $ | $ 56,700 | $ 155,500 | $ 174,100 | |||||||||||||||
Repurchase of shares (in shares) | 3,018,411 | 6,735,810 | ||||||||||||||||
Stock repurchase program, remaining authorized repurchase amount | $ | $ 93,300 | |||||||||||||||||
Surrender of shares for tax withholding (in shares) | 134,193 | 160,506 | 245,560 | |||||||||||||||
Common shares from conversion of preferred shares (in shares) | 4,032,427 | |||||||||||||||||
Series D Preferred Stock | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Preferred shares dividend (in dollars per share) | $ / shares | $ 1.625 | |||||||||||||||||
Preferred shares, dividend yield | 6.50% | 6.50% | 6.50% | |||||||||||||||
Initial conversion rate | 0.8204 | 0.6585 | 0.8204 | 0.6846 | ||||||||||||||
Initial conversion price per share (in dollars per share) | $ / shares | $ 30.47 | |||||||||||||||||
Additional common shares (in shares) | 4,032,427 | |||||||||||||||||
Liquidation preference (in dollars per share) | $ / shares | $ 25 | |||||||||||||||||
Percentage of average closing market price of the entity's common stock based on which ratio for conversion of preferred shares into common shares is determined | 98% | |||||||||||||||||
Purchase price as a percentage of liquidation preference | 100% | |||||||||||||||||
Common shares from conversion of preferred shares (in shares) | 4,915,196 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Distributions Paid Per Share (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Common Share | |||
Ordinary income | 63.91% | 99.07% | 0% |
Return of capital | 36.09% | 0.93% | 0% |
Capital gain | 0% | 0% | 0% |
Unrecaptured Section 1250 gain | 0% | 0% | 0% |
Common share, distributions paid | 100% | 100% | 0% |
Shareholders' Equity - Schedu_2
Shareholders' Equity - Schedule of Declared Distributions (Details) - $ / shares | 12 Months Ended | ||||||||||
Nov. 15, 2023 | Oct. 16, 2023 | Aug. 15, 2023 | Jul. 14, 2023 | May 15, 2023 | Apr. 13, 2023 | Feb. 15, 2023 | Jan. 13, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||||||||||
Ordinary income | 100% | 100% | 0% | ||||||||
Return of capital | 0% | 0% | 100% | ||||||||
Capital gain | 0% | 0% | 0% | ||||||||
Unrecaptured Section 1250 gain | 0% | 0% | 0% | ||||||||
Preferred stock, dividends, distribution percentage | 100% | 100% | 100% | ||||||||
Series D Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Dividend declared (in dollars per share) | $ 0.40625 | $ 0.40625 | $ 0.40625 | $ 0.40625 | |||||||
Dividends paid (in dollars per share) | $ 0.40625 | $ 0.40625 | $ 0.40625 | $ 0.40625 |
Noncontrolling Interest - Addit
Noncontrolling Interest - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Noncontrolling Interest [Abstract] | |||
Common stock, conversion term | 6 months | ||
Common stock, conversion basis | 1 | ||
EQC Operating Trust | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest, weighted average ownership percentage by parent | 99.69% | 99.75% | 99.80% |
Noncontrolling Interest - Commo
Noncontrolling Interest - Common Shares and Units Activity (Details) | 12 Months Ended |
Dec. 31, 2023 shares | |
Equity Commonwealth | |
Increase (Decrease) in Stockholders' Equity | |
Noncontrolling ownership interest in the Operating Trust | 0.21% |
Common Shares, OP Units and LTIP Units | |
Increase (Decrease) in Stockholders' Equity | |
Beginning balance (in shares) | 109,708,144 |
Redemption and surrender of shares (in shares) | (3,152,604) |
OP Unit Redemption (in shares) | 0 |
Share-based compensation grants and vesting, net of forfeitures (in shares) | 517,916 |
Ending balance (in shares) | 107,073,456 |
Common Shares | |
Increase (Decrease) in Stockholders' Equity | |
Beginning balance (in shares) | 109,428,252 |
Redemption and surrender of shares (in shares) | (3,152,604) |
OP Unit Redemption (in shares) | 135,392 |
Share-based compensation grants and vesting, net of forfeitures (in shares) | 436,398 |
Ending balance (in shares) | 106,847,438 |
OP Units and LTIP Units | Noncontrolling Interest | |
Increase (Decrease) in Stockholders' Equity | |
Beginning balance (in shares) | 279,892 |
Redemption and surrender of shares (in shares) | 0 |
OP Unit Redemption (in shares) | (135,392) |
Share-based compensation grants and vesting, net of forfeitures (in shares) | 81,518 |
Ending balance (in shares) | 226,018 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
State and local | $ (50) | $ (103) | $ (120) |
Federal | (1,816) | (350) | 0 |
Income tax expense | $ (1,866) | $ (453) | $ (120) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Uncertain tax position as part of income tax provision | $ 0.1 | $ 0 | $ 0.1 |
Taxable Gain | 200 | 82 | |
Net operating loss carryforwards | 29 | $ 29 | |
Net operating loss carryforwards, expiring in 2037 | 18 | ||
Tax credit carryforward, no expiration date | $ 11 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Effective Tax Rate and the U.S. Federal Statutory Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Taxes at statutory U.S. federal income tax rate | 21% | 21% | 21% |
Dividends paid deduction and net operating loss utilization | (21.00%) | (21.00%) | (21.00%) |
Federal taxes | 1.95% | 0.93% | 0% |
State and local income taxes | 0.05% | 0.27% | (0.74%) |
Effective tax rate | 2% | 1.20% | (0.74%) |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |||||||||||||||
Jun. 13, 2023 USD ($) trustee $ / shares shares | Jan. 26, 2023 $ / shares shares | Jun. 21, 2022 USD ($) trustee $ / shares shares | Jan. 26, 2022 $ / shares shares | Jun. 23, 2021 USD ($) trustee $ / shares shares | Jan. 25, 2021 $ / shares shares | Jun. 16, 2015 | Dec. 31, 2027 shares | Dec. 31, 2026 shares | Dec. 31, 2025 shares | Dec. 31, 2024 shares | Dec. 31, 2023 USD ($) tranche $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 shares | Jun. 20, 2019 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of shares authorized (in shares) | 1,650,000 | |||||||||||||||
Common shares available for issuance (in shares) | 2,073,350 | |||||||||||||||
Number of independent trustees | trustee | 6 | 6 | 6 | |||||||||||||
Common stock issued (in shares) | 106,847,438 | 109,428,252 | ||||||||||||||
Compensation expense, accelerated vesting due to a staffing reduction | $ | $ 5.2 | $ 0.4 | $ 3.5 | |||||||||||||
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 arrangement, plan term | 10 years | |||||||||||||||
General and administrative expense | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Compensation expense | $ | $ 16 | $ 11.9 | $ 15.4 | |||||||||||||
Restricted shares | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of equity awards granted (in shares) | 132,794 | 18,020 | 92,573 | 18,505 | 122,466 | |||||||||||
Granted (in dollars per share) | $ / shares | $ 25.61 | $ 25.50 | $ 28.25 | |||||||||||||
Common stock issued (in shares) | 523,662 | |||||||||||||||
Restricted shares | Independent Trustee | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of equity awards granted (in shares) | 28,865 | |||||||||||||||
RSUs | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 3 years | |||||||||||||||
Number of tranches | tranche | 2 | |||||||||||||||
Vested (in shares) | 274,739 | 382,993 | 523,662 | |||||||||||||
Common stock issued (in shares) | 274,739 | |||||||||||||||
RSUs | Share-based Payment Arrangement, Tranche One | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting percentage | 50% | |||||||||||||||
RSUs | Share-based Payment Arrangement, Tranche Two | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 1 year | |||||||||||||||
Vesting percentage | 50% | |||||||||||||||
RSUs, target | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of equity awards granted (in shares) | 269,609 | 187,951 | 248,646 | |||||||||||||
RSUs, maximum | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of equity awards granted (in shares) | 672,000 | 468,468 | 619,750 | |||||||||||||
LTIP Units | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Equity award, conversion basis | 1 | |||||||||||||||
Number of equity awards granted (in shares) | 5,773 | |||||||||||||||
Time-Based LTIP Units | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of equity awards granted (in shares) | 3,604 | 29,071 | 3,701 | |||||||||||||
Market-Based LTIP Units | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vested (in shares) | 81,434 | |||||||||||||||
Conversion of equity instruments (in shares) | 81,434 | |||||||||||||||
Market-Based LTIP Units, target | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of equity awards granted (in shares) | 59,024 | |||||||||||||||
Market-Based LTIP Units At Maximum | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of equity awards granted (in shares) | 147,117 | |||||||||||||||
OP Units | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Conversion of equity instruments (in shares) | 81,434 | |||||||||||||||
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) | 5,773 | 167,432 | 143,268 | 144,672 | ||||||||||||
Granted (in dollars per share) | $ / shares | $ 24.61 | $ 25.84 | $ 28.06 | |||||||||||||
Share based compensation amount | $ | $ 0.1 | $ 0.1 | $ 0.1 | |||||||||||||
Price per share (in dollars per share) | $ / shares | $ 20.79 | $ 27.75 | $ 27.02 | |||||||||||||
Vested (in shares) | 195,521 | 125,958 | 188,990 | |||||||||||||
Unvested (in shares) | 330,591 | 358,680 | 341,370 | 385,688 | ||||||||||||
Estimated future compensation expense for unvested shares | $ | $ 4.3 | |||||||||||||||
Weighted average period over which compensation expense will be recorded | 2 years 3 months 18 days | |||||||||||||||
Restricted Shares and Time-Based LTIP Units | Independent Trustee | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of equity awards granted (in shares) | 3,604 | 3,701 | ||||||||||||||
Restricted Shares and Time-Based LTIP Units | Scenario, Forecast | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vested (in shares) | 53,503 | 73,427 | 90,554 | 113,107 | ||||||||||||
RSUs and Market-Based LTIP Units | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of equity awards granted (in shares) | 672,000 | 615,585 | 619,750 | |||||||||||||
Granted (in dollars per share) | $ / shares | $ 14.65 | $ 14.09 | $ 15.19 | |||||||||||||
Vested (in shares) | 350,484 | 382,993 | 605,096 | |||||||||||||
Unvested (in shares) | 2,038,776 | 1,853,472 | 1,979,572 | 1,964,918 | ||||||||||||
Estimated future compensation expense for unvested shares | $ | $ 9.7 | |||||||||||||||
Weighted average period over which compensation expense will be recorded | 2 years 2 months 12 days | |||||||||||||||
Common Shares | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Common stock issued (in shares) | 382,993 | |||||||||||||||
Maximum | Equity Commonwealth 2015 Omnibus Incentive Plan | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Common shares available for issuance (in shares) | 7,400,000 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Restricted Share and Restricted Stock Unit Activity (Details) - $ / shares | 12 Months Ended | |||
Jun. 13, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Shares and Time-Based LTIP Units | ||||
Number of Shares | ||||
Beginning balance (in shares) | 358,680 | 341,370 | 385,688 | |
Granted (in shares) | 5,773 | 167,432 | 143,268 | 144,672 |
Vested (in shares) | (195,521) | (125,958) | (188,990) | |
Not earned (in shares) | 0 | 0 | 0 | |
Forfeited (in shares) | 0 | 0 | 0 | |
Ending balance (in shares) | 330,591 | 358,680 | 341,370 | |
Weighted Average Grant Date Fair Value | ||||
Beginning balance (in dollars per share) | $ 28.62 | $ 30.35 | $ 31.52 | |
Granted (in dollars per share) | 24.61 | 25.84 | 28.06 | |
Vested (in dollars per share) | 29.07 | 30.15 | 30.99 | |
Not earned (in dollars per share) | 0 | 0 | 0 | |
Forfeited (in dollars per share) | 0 | 0 | 0 | |
Ending balance (in dollars per share) | $ 26.32 | $ 28.62 | $ 30.35 | |
RSUs and Market-Based LTIP Units | ||||
Number of Shares | ||||
Beginning balance (in shares) | 1,853,472 | 1,979,572 | 1,964,918 | |
Granted (in shares) | 672,000 | 615,585 | 619,750 | |
Vested (in shares) | (350,484) | (382,993) | (605,096) | |
Not earned (in shares) | (136,212) | (358,692) | 0 | |
Forfeited (in shares) | 0 | 0 | 0 | |
Ending balance (in shares) | 2,038,776 | 1,853,472 | 1,979,572 | |
Weighted Average Grant Date Fair Value | ||||
Beginning balance (in dollars per share) | $ 15.13 | $ 15.61 | $ 15.65 | |
Granted (in dollars per share) | 14.65 | 14.09 | 15.19 | |
Vested (in dollars per share) | 16.07 | 15.46 | 15.31 | |
Not earned (in dollars per share) | 16.12 | 15.91 | 0 | |
Forfeited (in dollars per share) | 0 | 0 | 0 | |
Ending balance (in dollars per share) | $ 14.74 | $ 15.13 | $ 15.61 |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary of Assumptions and Fair Values for Restricted Stock Units Granted in the Period (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
RSUs and Market-Based LTIP Units | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | |||
Fair value of RSUs and market-based LTIP Units granted (in dollars per share) | $ 14.65 | $ 14.09 | $ 15.19 |
Expected term (years) | 4 years | 4 years | 4 years |
Expected volatility | 18.47% | 17.04% | 16.99% |
Expected dividend yield | 0% | 0% | 0% |
Risk-free rate | 3.84% | 1.39% | 0.17% |
RSUs and Market-Based LTIP Units, target | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | |||
Fair value of RSUs and market-based LTIP Units granted (in dollars per share) | $ 36.51 | $ 35.11 | $ 37.87 |
RSUs and Market-Based LTIP Units, maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | |||
Fair value of RSUs and market-based LTIP Units granted (in dollars per share) | $ 14.65 | $ 14.09 | $ 15.19 |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities - Narrative (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Fair value of assets and liabilities | $ 0 | $ 0 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator for earnings per common share - basic: | |||
Net income (loss) | $ 91,445 | $ 37,357 | $ (16,429) |
Net (income) loss attributable to noncontrolling interest | (281) | (94) | 33 |
Preferred distributions | (7,988) | (7,988) | (7,988) |
Net income (loss) attributable to Equity Commonwealth common shareholders | 83,176 | 29,275 | (24,384) |
Numerator for earnings per common share - diluted: | |||
Net income (loss) | 91,445 | 37,357 | (16,429) |
Net (income) loss attributable to noncontrolling interest | (281) | (94) | 33 |
Preferred distributions | (7,988) | (7,988) | (7,988) |
Numerator for net income (loss) per share - diluted | $ 83,176 | $ 29,275 | $ (24,384) |
Denominator for earnings per common share - basic and diluted: | |||
Weighted average common shares outstanding — basic (in shares) | 108,841 | 111,674 | 121,411 |
Weighted average common shares outstanding — diluted (in shares) | 110,185 | 112,825 | 121,411 |
Net income (loss) per common share attributable to Equity Commonwealth common shareholders, basic | |||
Basic (in dollars per share) | $ 0.76 | $ 0.26 | $ (0.20) |
Net income (loss) per common share attributable to Equity Commonwealth common shareholders, diluted | |||
Diluted (in dollars per share) | $ 0.75 | $ 0.26 | $ (0.20) |
Anti-dilutive securities(4): | |||
Preferred shares, dividend yield | 6.50% | 6.50% | |
Weighted average number of shares, restricted stock units, unvested (in shares) | 127 | 105 | 256 |
Series D Preferred Stock | |||
Anti-dilutive securities(4): | |||
Preferred shares, dividend yield | 6.50% | 6.50% | 6.50% |
Series D Preferred Stock | |||
Anti-dilutive securities(4): | |||
Effect of anti-dilutive securities (in shares) | 4,032 | 3,365 | 3,237 |
RSUs | |||
Anti-dilutive securities(4): | |||
Effect of anti-dilutive securities (in shares) | 0 | 0 | 549 |
LTIP Units | |||
Anti-dilutive securities(4): | |||
Effect of anti-dilutive securities (in shares) | 0 | 0 | 47 |
Operating Partnership Units and Time-Based LTIP Units | |||
Anti-dilutive securities(4): | |||
Effect of anti-dilutive securities (in shares) | 335 | 276 | 245 |
RSUs | |||
Denominator for earnings per common share - basic and diluted: | |||
Weighted average number of common shares outstanding, dilutive adjustment (in shares) | 1,224 | 970 | 0 |
LTIP Units | |||
Denominator for earnings per common share - basic and diluted: | |||
Weighted average number of common shares outstanding, dilutive adjustment (in shares) | 120 | 181 | 0 |
Segment Information (Details)
Segment Information (Details) | 12 Months Ended |
Dec. 31, 2023 segment | |
Concentration Risk [Line Items] | |
Number of reportable segments | 1 |
Product Concentration Risk | Revenue | Office Properties | |
Concentration Risk [Line Items] | |
Concentration risk | 100% |
Related Person Transactions (De
Related Person Transactions (Details) - Two North Riverside Plaza Joint Venture Limited Partnership | 12 Months Ended | ||||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) option | Dec. 31, 2021 USD ($) option | Aug. 31, 2023 USD ($) option | Dec. 31, 2020 USD ($) option | |
Related Party Transaction [Line Items] | |||||
Renewal term of lease arrangement | 1 year | 1 year | 1 year | 1 year | |
Number of renewal options of lease arrangement | option | 0 | 0 | 0 | 0 | |
Lessee, operating lease, liability, to be paid, year one | $ 400,000 | $ 400,000 | $ 400,000 | $ 400,000 | $ 300,000 |
Operating lease, expense | 400,000 | 400,000 | $ 300,000 | ||
Accounts payable | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event - $ / shares | Feb. 15, 2024 | Jan. 16, 2024 |
Subsequent Event [Line Items] | ||
Dividend declared (in dollars per share) | $ 0.40625 | |
Scenario, Forecast | ||
Subsequent Event [Line Items] | ||
Dividends paid (in dollars per share) | $ 0.40625 |
SCHEDULE III REAL ESTATE AND _2
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION - Reconciliation of Carrying Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Initial Cost to Company | ||||
Land | $ 44,060 | |||
Buildings and Improvements | 272,927 | |||
Costs Capitalized Subsequent to Acquisition, Net | 112,792 | |||
Impairment/Write Downs | (17,892) | |||
Cost Amount Carried at Close of Period | ||||
Land | 44,060 | |||
Buildings and Improvements | 367,827 | |||
Total | 411,887 | |||
Accumulated Depreciation | 180,535 | $ 169,530 | $ 156,439 | $ 143,319 |
1225 Seventeenth Street | ||||
Initial Cost to Company | ||||
Land | 22,400 | |||
Buildings and Improvements | 110,090 | |||
Costs Capitalized Subsequent to Acquisition, Net | 48,374 | |||
Impairment/Write Downs | (4,877) | |||
Cost Amount Carried at Close of Period | ||||
Land | 22,400 | |||
Buildings and Improvements | 153,587 | |||
Total | 175,987 | |||
Accumulated Depreciation | 65,171 | |||
1250 H Street, NW | ||||
Initial Cost to Company | ||||
Land | 5,975 | |||
Buildings and Improvements | 53,778 | |||
Costs Capitalized Subsequent to Acquisition, Net | 22,316 | |||
Impairment/Write Downs | (6,046) | |||
Cost Amount Carried at Close of Period | ||||
Land | 5,975 | |||
Buildings and Improvements | 70,048 | |||
Total | 76,023 | |||
Accumulated Depreciation | 41,761 | |||
206 East 9th Street | ||||
Initial Cost to Company | ||||
Land | 7,900 | |||
Buildings and Improvements | 38,533 | |||
Costs Capitalized Subsequent to Acquisition, Net | 9,952 | |||
Impairment/Write Downs | (1,710) | |||
Cost Amount Carried at Close of Period | ||||
Land | 7,900 | |||
Buildings and Improvements | 46,775 | |||
Total | 54,675 | |||
Accumulated Depreciation | 14,003 | |||
Bridgepoint Square | ||||
Initial Cost to Company | ||||
Land | 7,785 | |||
Buildings and Improvements | 70,526 | |||
Costs Capitalized Subsequent to Acquisition, Net | 32,150 | |||
Impairment/Write Downs | (5,259) | |||
Cost Amount Carried at Close of Period | ||||
Land | 7,785 | |||
Buildings and Improvements | 97,417 | |||
Total | 105,202 | |||
Accumulated Depreciation | $ 59,600 |
SCHEDULE III REAL ESTATE AND _3
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION - Analysis of Carrying Amount of Real Estate Properties and Accumulated Depreciation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Real Estate Properties | |||
Additions | $ 7,600 | $ 4,000 | $ 6,300 |
Balance at the end of the year | 411,887 | ||
Accumulated Depreciation | |||
Balance at the beginning of the year | 169,530 | 156,439 | 143,319 |
Additions | 14,879 | 15,072 | 15,054 |
Disposals | (3,874) | (1,981) | (1,934) |
Balance at the end of the year | 180,535 | 169,530 | 156,439 |
Aggregate cost of properties for federal income tax purposes | 545,860 | ||
Real Estate Properties | |||
Real Estate Properties | |||
Balance at the beginning of the year | 408,123 | 406,102 | 401,710 |
Additions | 7,638 | 4,002 | 6,326 |
Disposals | (3,874) | (1,981) | (1,934) |
Balance at the end of the year | $ 411,887 | $ 408,123 | $ 406,102 |
Buildings and improvements | Maximum | |||
Accumulated Depreciation | |||
Estimated useful lives | 40 years | ||
Personal property | Maximum | |||
Accumulated Depreciation | |||
Estimated useful lives | 12 years |