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These terms and conditions govern your use of the website alphaminr.com and its related services.
These Terms and Conditions (“Terms”) are a binding contract between you and Alphaminr, (“Alphaminr”, “we”, “us” and “service”). You must agree to and accept the Terms. These Terms include the provisions in this document as well as those in the Privacy Policy. These terms may be modified at any time.
Your subscription will be on a month to month basis and automatically renew every month. You may terminate your subscription at any time through your account.
We will provide you with advance notice of any change in fees.
You represent that you are of legal age to form a binding contract. You are responsible for any
activity associated with your account. The account can be logged in at only one computer at a
time.
The Services are intended for your own individual use. You shall only use the Services in a
manner that complies with all laws. You may not use any automated software, spider or system to
scrape data from Alphaminr.
Alphaminr is not a financial advisor and does not provide financial advice of any kind. The service is provided “As is”. The materials and information accessible through the Service are solely for informational purposes. While we strive to provide good information and data, we make no guarantee or warranty as to its accuracy.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, UNDER NO CIRCUMSTANCES SHALL ALPHAMINR BE LIABLE TO YOU FOR DAMAGES OF ANY KIND, INCLUDING DAMAGES FOR INVESTMENT LOSSES, LOSS OF DATA, OR ACCURACY OF DATA, OR FOR ANY AMOUNT, IN THE AGGREGATE, IN EXCESS OF THE GREATER OF (1) FIFTY DOLLARS OR (2) THE AMOUNTS PAID BY YOU TO ALPHAMINR IN THE SIX MONTH PERIOD PRECEDING THIS APPLICABLE CLAIM. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL OR CERTAIN OTHER DAMAGES, SO THE ABOVE LIMITATION AND EXCLUSIONS MAY NOT APPLY TO YOU.
If any provision of these Terms is found to be invalid under any applicable law, such provision shall not affect the validity or enforceability of the remaining provisions herein.
This privacy policy describes how we (“Alphaminr”) collect, use, share and protect your personal information when we provide our service (“Service”). This Privacy Policy explains how information is collected about you either directly or indirectly. By using our service, you acknowledge the terms of this Privacy Notice. If you do not agree to the terms of this Privacy Policy, please do not use our Service. You should contact us if you have questions about it. We may modify this Privacy Policy periodically.
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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2018
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or
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
(State of Organization)
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26-4273474
(IRS Employer Identification No.)
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Title Of Each Class
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Name Of Each Exchange On Which Registered
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Common Shares of Beneficial Interest
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The Nasdaq Stock Market LLC
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5.875% Senior Notes due 2046
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The Nasdaq Stock Market LLC
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Large accelerated filer ☒
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☐
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Emerging growth company ☐
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OUR SALES AND ACQUISITIONS OF PROPERTIES,
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OUR ABILITY TO COMPETE FOR ACQUISITIONS AND TENANCIES EFFECTIVELY,
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THE LIKELIHOOD THAT OUR TENANTS WILL PAY RENT OR BE NEGATIVELY AFFECTED BY CYCLICAL ECONOMIC CONDITIONS OR GOVERNMENT BUDGET CONSTRAINTS,
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THE LIKELIHOOD THAT OUR TENANTS WILL RENEW OR EXTEND THEIR LEASES AND NOT EXERCISE EARLY TERMINATION OPTIONS PURSUANT TO THEIR LEASES OR THAT WE WILL OBTAIN REPLACEMENT TENANTS,
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THE LIKELIHOOD THAT OUR RENTS WILL INCREASE WHEN WE RENEW OR EXTEND OUR LEASES OR ENTER NEW LEASES,
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OUR ABILITY TO PAY DISTRIBUTIONS TO OUR SHAREHOLDERS AND TO SUSTAIN THE AMOUNT OF SUCH DISTRIBUTIONS,
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OUR POLICIES AND PLANS REGARDING INVESTMENTS, FINANCINGS AND DISPOSITIONS,
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THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY,
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OUR EXPECTATION THAT THERE WILL BE OPPORTUNITIES FOR US TO ACQUIRE, AND THAT WE WILL ACQUIRE, ADDITIONAL PROPERTIES PRIMARILY LEASED TO SINGLE TENANTS AND TENANTS WITH HIGH CREDIT QUALITY CHARACTERISTICS SUCH AS GOVERNMENTAL ENTITIES,
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OUR EXPECTATIONS REGARDING DEMAND FOR LEASED SPACE,
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OUR ABILITY TO RAISE DEBT OR EQUITY CAPITAL,
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OUR ABILITY TO PAY INTEREST ON AND PRINCIPAL OF OUR DEBT,
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OUR ABILITY TO APPROPRIATELY BALANCE OUR USE OF DEBT AND EQUITY CAPITAL,
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OUR CREDIT RATINGS,
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OUR EXPECTATION THAT OUR SHAREHOLDERS WILL BENEFIT FROM THE MERGER WITH SELECT INCOME REIT, OR SIR,
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OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP INTEREST IN AND OTHER RELATIONSHIPS WITH THE RMR GROUP INC., OR RMR INC.,
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OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP INTEREST IN AND OTHER RELATIONSHIPS WITH AFFILIATES INSURANCE COMPANY, OR AIC, AND FROM OUR PARTICIPATION IN INSURANCE PROGRAMS ARRANGED BY AIC,
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THE CREDIT QUALITIES OF OUR TENANTS,
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OUR QUALIFICATION FOR TAXATION AS A REAL ESTATE INVESTMENT TRUST, OR REIT,
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CHANGES IN FEDERAL OR STATE TAX LAWS, AND
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OTHER MATTERS.
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THE IMPACT OF CONDITIONS IN THE ECONOMY AND THE CAPITAL MARKETS ON US AND OUR TENANTS,
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THE IMPACT OF A U.S. GOVERNMENT SHUTDOWN ON OUR ABILITY TO COLLECT RENTS OR PAY OUR OPERATING EXPENSES, DEBT OBLIGATIONS AND DISTRIBUTIONS TO SHAREHOLDERS ON A TIMELY BASIS,
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COMPETITION WITHIN THE REAL ESTATE INDUSTRY, PARTICULARLY IN THOSE MARKETS IN WHICH OUR PROPERTIES ARE LOCATED,
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THE IMPACT OF CHANGES IN THE REAL ESTATE NEEDS AND FINANCIAL CONDITIONS OF OUR TENANTS,
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COMPLIANCE WITH, AND CHANGES TO, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS, ACCOUNTING RULES, TAX LAWS AND SIMILAR MATTERS,
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ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH OUR RELATED PARTIES, INCLUDING OUR MANAGING TRUSTEES, THE RMR GROUP LLC, OR RMR LLC, RMR INC., AIC AND OTHERS AFFILIATED WITH THEM,
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LIMITATIONS IMPOSED ON OUR BUSINESS AND OUR ABILITY TO SATISFY COMPLEX RULES IN ORDER FOR US TO QUALIFY FOR TAXATION AS A REIT FOR U.S. FEDERAL INCOME TAX PURPOSES, AND
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ACTS OF TERRORISM, OUTBREAKS OF SO CALLED PANDEMICS OR OTHER MANMADE OR NATURAL DISASTERS BEYOND OUR CONTROL.
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OUR ABILITY TO MAKE FUTURE DISTRIBUTIONS TO OUR SHAREHOLDERS AND TO MAKE PAYMENTS OF PRINCIPAL AND INTEREST ON OUR INDEBTEDNESS DEPENDS UPON A NUMBER OF FACTORS, INCLUDING OUR FUTURE EARNINGS, THE CAPITAL COSTS WE INCUR TO LEASE OUR PROPERTIES AND OUR WORKING CAPITAL REQUIREMENTS. WE MAY BE UNABLE TO PAY OUR DEBT OBLIGATIONS OR TO MAINTAIN OUR CURRENT RATE OF DISTRIBUTIONS ON OUR COMMON SHARES AND FUTURE DISTRIBUTIONS MAY BE REDUCED OR ELIMINATED,
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OUR ABILITY TO GROW OUR BUSINESS AND INCREASE OUR DISTRIBUTIONS DEPENDS IN LARGE PART UPON OUR ABILITY TO BUY PROPERTIES AND LEASE THEM FOR RENTS, LESS THEIR PROPERTY OPERATING COSTS, THAT EXCEED OUR CAPITAL COSTS. WE MAY BE UNABLE TO IDENTIFY PROPERTIES THAT WE WANT TO ACQUIRE AND WE MAY FAIL TO REACH AGREEMENT WITH THE SELLERS AND COMPLETE THE PURCHASES OF ANY PROPERTIES WE WANT TO ACQUIRE. IN ADDITION, ANY PROPERTIES WE MAY ACQUIRE MAY NOT PROVIDE US WITH RENTS LESS PROPERTY OPERATING COSTS THAT EXCEED OUR CAPITAL COSTS OR ACHIEVE OUR EXPECTED RETURNS,
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AS PART OF OUR LONG TERM FINANCING PLANS TO REDUCE OUR LEVERAGE, WE EXPECT TO DISPOSE OF CERTAIN OF OUR PROPERTIES. CURRENTLY, WE ARE MARKETING OR PLAN TO MARKET
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SOME OF OUR TENANTS MAY NOT RENEW EXPIRING LEASES, AND WE MAY BE UNABLE TO OBTAIN NEW TENANTS TO MAINTAIN OR INCREASE THE HISTORICAL OCCUPANCY RATES OF, OR RENTS FROM, OUR PROPERTIES,
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SOME GOVERNMENT TENANTS MAY EXERCISE THEIR RIGHTS TO VACATE THEIR SPACE BEFORE THE STATED EXPIRATIONS OF THEIR LEASES, AND WE MAY BE UNABLE TO OBTAIN NEW TENANTS TO MAINTAIN THE HISTORICAL OCCUPANCY RATES OF, OR RENTS FROM, OUR PROPERTIES,
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RENTS THAT WE CAN CHARGE AT OUR PROPERTIES MAY DECLINE UPON RENEWALS OR EXPIRATIONS BECAUSE OF CHANGING MARKET CONDITIONS OR OTHERWISE,
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LEASING FOR SOME OF OUR PROPERTIES DEPENDS ON A SINGLE TENANT AND WE MAY BE ADVERSELY AFFECTED BY THE BANKRUPTCY, INSOLVENCY, A DOWNTURN OF BUSINESS OR A LEASE TERMINATION OF A SINGLE TENANT,
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OUR BELIEF THAT THERE IS A LIKELIHOOD THAT TENANTS MAY RENEW OR EXTEND OUR LEASES PRIOR TO THEIR EXPIRATIONS WHENEVER THEY HAVE MADE SIGNIFICANT INVESTMENTS IN THE LEASED PROPERTIES, OR BECAUSE THOSE PROPERTIES MAY BE OF STRATEGIC IMPORTANCE TO THEM, MAY NOT BE REALIZED,
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OUR BELIEF THAT THE REDUCTION IN GOVERNMENT TENANT SPACE UTILIZATION AND THE CONSOLIDATION OF GOVERNMENT TENANTS INTO GOVERNMENT OWNED REAL ESTATE IS SUBSTANTIALLY COMPLETE MAY PROVE MISPLACED IF THESE PRIOR TRENDS CONTINUE OR DO NOT MODERATE TO THE EXTENT WE EXPECT,
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CONTINGENCIES IN OUR ACQUISITION AND SALE AGREEMENTS MAY NOT BE SATISFIED AND ANY EXPECTED ACQUISITIONS AND SALES AND ANY RELATED LEASE ARRANGEMENTS WE EXPECT TO ENTER MAY NOT OCCUR, MAY BE DELAYED OR THE TERMS OF SUCH TRANSACTIONS OR ARRANGEMENTS MAY CHANGE,
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THE COMPETITIVE ADVANTAGES WE BELIEVE WE HAVE MAY NOT IN FACT EXIST OR PROVIDE US WITH THE ADVANTAGES WE EXPECT. WE MAY FAIL TO MAINTAIN ANY OF THESE ADVANTAGES OR OUR COMPETITION MAY OBTAIN OR INCREASE THEIR COMPETITIVE ADVANTAGES RELATIVE TO US,
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WE INTEND TO CONDUCT OUR BUSINESS ACTIVITIES IN A MANNER THAT WILL AFFORD US REASONABLE ACCESS TO CAPITAL FOR INVESTMENT AND FINANCING ACTIVITIES. HOWEVER, WE MAY NOT SUCCEED IN THIS REGARD AND WE MAY NOT HAVE REASONABLE ACCESS TO CAPITAL,
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CONTINUED AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY IS SUBJECT TO OUR SATISFYING CERTAIN FINANCIAL COVENANTS AND OTHER CREDIT FACILITY CONDITIONS THAT WE MAY BE UNABLE TO SATISFY,
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ACTUAL COSTS UNDER OUR REVOLVING CREDIT FACILITY OR OTHER FLOATING RATE DEBT WILL BE HIGHER THAN LIBOR PLUS A PREMIUM BECAUSE OF FEES AND EXPENSES ASSOCIATED WITH SUCH DEBT,
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THE INTEREST RATES PAYABLE UNDER OUR FLOATING RATE DEBT OBLIGATIONS DEPEND UPON OUR CREDIT RATINGS. WE CURRENTLY HAVE A NEGATIVE CREDIT RATINGS OUTLOOK BY MOODY'S INVESTORS SERVICE WHICH MAY IMPLY THAT OUR CREDIT RATINGS MAY BE DOWNGRADED. IF OUR CREDIT RATINGS ARE DOWNGRADED, OUR BORROWING COSTS WILL INCREASE,
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OUR ABILITY TO ACCESS DEBT CAPITAL AND THE COST OF OUR DEBT CAPITAL WILL DEPEND IN PART ON OUR CREDIT RATINGS. IF OUR CREDIT RATINGS ARE DOWNGRADED, WE MAY NOT BE ABLE TO ACCESS DEBT CAPITAL OR THE DEBT CAPITAL WE CAN ACCESS MAY BE EXPENSIVE,
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WE MAY BE UNABLE TO REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE,
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THE MAXIMUM BORROWING AVAILABILITY UNDER OUR REVOLVING CREDIT FACILITY AND TERM LOANS MAY BE INCREASED TO UP TO $2.5 BILLION ON A COMBINED BASIS IN CERTAIN CIRCUMSTANCES; HOWEVER, INCREASING THE MAXIMUM BORROWING AVAILABILITY UNDER OUR REVOLVING CREDIT FACILITY AND TERM LOANS IS SUBJECT TO OUR OBTAINING ADDITIONAL COMMITMENTS FROM LENDERS, WHICH MAY NOT OCCUR,
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WE HAVE THE OPTION TO EXTEND THE MATURITY DATE OF OUR REVOLVING CREDIT FACILITY UPON PAYMENT OF A FEE AND MEETING OTHER CONDITIONS; HOWEVER, THE APPLICABLE CONDITIONS MAY NOT BE MET,
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WE MAY INCUR SIGNIFICANT COSTS TO PREPARE A PROPERTY FOR A TENANT, PARTICULARLY FOR SINGLE TENANT PROPERTIES,
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WE MAY SPEND MORE FOR CAPITAL EXPENDITURES THAN WE CURRENTLY EXPECT,
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THE BUSINESS AND PROPERTY MANAGEMENT AGREEMENTS BETWEEN US AND RMR LLC HAVE CONTINUING 20 YEAR TERMS. HOWEVER, THOSE AGREEMENTS PERMIT EARLY TERMINATION IN CERTAIN CIRCUMSTANCES. ACCORDINGLY, WE CANNOT BE SURE THAT THESE AGREEMENTS WILL REMAIN IN EFFECT FOR CONTINUING 20 YEAR TERMS,
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WE BELIEVE THAT OUR RELATIONSHIPS WITH OUR RELATED PARTIES, INCLUDING RMR LLC, RMR INC., AIC AND OTHERS AFFILIATED WITH THEM MAY BENEFIT US AND PROVIDE US WITH COMPETITIVE ADVANTAGES IN OPERATING AND GROWING OUR BUSINESS. HOWEVER, THE ADVANTAGES WE BELIEVE WE MAY REALIZE FROM THESE RELATIONSHIPS MAY NOT MATERIALIZE,
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WE MAY FAIL TO EXECUTE SUCCESSFULLY ON OUR EXPANDED BUSINESS STRATEGY OR INCREASED SCALE OF OUR BUSINESS RESULTING FROM THE SIR MERGER AND THEREFORE MAY NOT REALIZE THE BENEFITS WE EXPECT FROM THE SIR MERGER, AND
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AS OF DECEMBER 31, 2018, WE HAD ESTIMATED UNSPENT LEASING RELATED OBLIGATIONS OF
$58.4 MILLION
. OUR UNSPENT LEASING RELATED OBLIGATIONS MAY COST MORE AND MAY TAKE LONGER TO COMPLETE THAN WE CURRENTLY EXPECT, AND WE MAY INCUR INCREASED AMOUNTS FOR THESE AND SIMILAR PURPOSES IN THE FUTURE.
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our cost of capital compared to the projected returns we may realize by owning the property;
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the pricing of comparable properties as evidenced by recent arm’s length market sales;
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the strategic fit of the property with the rest of our properties and portfolio;
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the location of the property;
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the type of property (e.g., single tenant or multi-tenant, etc.);
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the growth, tax and regulatory environments of the market in which the property is located;
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the occupancy and demand for similar properties in the same or nearby markets;
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the current or potential market position of the property;
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the historic and projected rents received and likely to be received from the property;
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the historic and expected operating expenses, including real estate taxes, incurred and expected to be incurred at the property;
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the remaining term of the lease(s) at the property and other lease terms;
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the industry(ies) in which the tenant(s) operate;
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the experience and credit quality of the property’s tenant(s);
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the likelihood of the tenant(s) renewing at lease expiration;
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the current and expected future space utilization at the property by its tenant(s);
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the construction quality, physical condition, age and design of the property;
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expected capital expenditures that may be needed at the property;
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the use and size of the property;
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the price at which the property may be acquired;
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the estimated replacement cost of the property; and
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the existence of alternative sources, uses or needs for our capital, including our debt leverage.
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the estimated sales price or value we may receive by selling the property;
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our intended use of the proceeds we may realize from the sale of a property;
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our evaluation of future rent for the property relative to leasing costs;
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the strategic fit of the property or investment with the rest of our portfolio;
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the capital required to maintain the property;
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the remaining length of the current leases and its (their) other terms;
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our expectation regarding tenant lease renewals or the likelihood of finding (a) replacement tenant(s) if the property has significant vacancies or is likely to become substantially vacant;
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the potential costs associated with finding replacement tenant(s), including tenant improvements, leasing commissions and concessions, the cost to operate the property while vacant and building improvement capital, as compared to our projected returns from future rents;
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the occupancy of the property;
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the future expected space utilization of the tenant(s) and the potential impact that may have on occupancy at the property;
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whether the property's tenant(s) is current on its lease obligation(s);
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our evaluation of the property's tenant(s) ability to pay its contractual rents;
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the tax implications to us and our shareholders of any proposed dispositions;
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our financial position and needs from time to time; and
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the existence of alternative sources, uses or needs for capital, including our debt leverage.
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a bank, insurance company or other financial institution;
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a regulated investment company or REIT;
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a subchapter S corporation;
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a broker, dealer or trader in securities or foreign currencies;
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a person who marks-to-market our shares for U.S. federal income tax purposes;
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a U.S. shareholder (as defined below) that has a functional currency other than the U.S. dollar;
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a person who acquires or owns our shares in connection with employment or other performance of services;
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a person subject to alternative minimum tax;
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a person who acquires or owns our shares as part of a straddle, hedging transaction, constructive sale transaction, constructive ownership transaction or conversion transaction, or as part of a “synthetic security” or other integrated financial transaction;
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a person who owns 10% or more (by vote or value, directly or constructively under the IRC) of any class of our shares;
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a U.S. expatriate;
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a non-U.S. shareholder (as defined below) whose investment in our shares is effectively connected with the conduct of a trade or business in the United States;
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a nonresident alien individual present in the United States for 183 days or more during an applicable taxable year;
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a “qualified shareholder” (as defined in Section 897(k)(3)(A) of the IRC);
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a “qualified foreign pension fund” (as defined in Section 897(l)(2) of the IRC) or any entity wholly owned by one or more qualified foreign pension funds;
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a person subject to special tax accounting rules as a result of their use of applicable financial statements (within the meaning of Section 451(b)(3) of the IRC); or
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except as specifically described in the following summary, a trust, estate, tax-exempt entity or foreign person.
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an individual who is a citizen or resident of the United States, including an alien individual who is a lawful permanent resident of the United States or meets the substantial presence residency test under the federal income tax laws;
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an entity treated as a corporation for federal income tax purposes that is created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
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an estate the income of which is subject to federal income taxation regardless of its source; or
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a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or, to the extent provided in Treasury regulations, a trust in existence on August 20, 1996 that has elected to be treated as a domestic trust;
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whose status as a U.S. shareholder is not overridden by an applicable tax treaty. Conversely, a “non-U.S. shareholder” is a beneficial owner of our shares that is not
an entity (or other arrangement) treated as a partnership for federal income tax purposes and is not a U.S. shareholder.
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as the successor by merger to SIR, we would generally inherit any corporate income tax liabilities of SIR, including penalties and interest;
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we would be subject to tax on the built-in gain on each asset of SIR existing at the completion of the SIR Merger if we were to dispose of a SIR asset during a specified period (generally five years) following the completion of the SIR Merger; and
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we could be required to pay a special distribution and/or employ applicable deficiency dividend procedures (including interest payments to the IRS) to eliminate any earnings and profits accumulated by SIR for taxable periods for which it did not qualify for taxation as a REIT.
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We will be taxed at regular corporate income tax rates on any undistributed “real estate investment trust taxable income,” determined by including our undistributed ordinary income and net capital gains, if any.
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If we have net income from the disposition of “foreclosure property,” as described in Section 856(e) of the IRC, that is held primarily for sale to customers in the ordinary course of a trade or business or other nonqualifying income from foreclosure property, we will be subject to tax on this income at the highest regular corporate income tax rate.
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If we have net income from “prohibited transactions”-that is, dispositions at a gain of inventory or property held primarily for sale to customers in the ordinary course of a trade or business other than dispositions of foreclosure property and other than dispositions excepted by statutory safe harbors - we will be subject to tax on this income at a 100% rate.
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If we fail to satisfy the 75% gross income test or the 95% gross income test discussed below, due to reasonable cause and not due to willful neglect, but nonetheless maintain our qualification for taxation as a REIT because of specified cure provisions, we will be subject to tax at a 100% rate on the greater of the amount by which we fail the 75% gross income test or the 95% gross income test, with adjustments, multiplied by a fraction intended to reflect our profitability for the taxable year.
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If we fail to satisfy any of the REIT asset tests described below (other than a de minimis failure of the 5% or 10% asset tests) due to reasonable cause and not due to willful neglect, but nonetheless maintain our qualification for taxation as a REIT because of specified cure provisions, we will be subject to a tax equal to the greater of $50,000 or the highest regular corporate income tax rate multiplied by the net income generated by the nonqualifying assets that caused us to fail the test.
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If we fail to satisfy any provision of the IRC that would result in our failure to qualify for taxation as a REIT (other than violations of the REIT gross income tests or violations of the REIT asset tests described below) due to reasonable cause and not due to willful neglect, we may retain our qualification for taxation as a REIT but will be subject to a penalty of $50,000 for each failure.
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If we fail to distribute for any calendar year at least the sum of 85% of our REIT ordinary income for that year, 95% of our REIT capital gain net income for that year and any undistributed taxable income from prior periods, we will be subject to a 4% nondeductible excise tax on the excess of the required distribution over the amounts actually distributed.
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If we acquire a REIT asset where our adjusted tax basis in the asset is determined by reference to the adjusted tax basis of the asset in the hands of a C corporation, under specified circumstances we may be subject to federal income taxation on all or part of the built-in gain (calculated as of the date the property ceased being owned by the C corporation) on such asset. We generally do not expect to sell assets if doing so would result in the imposition of a material built-in gains tax liability; but if and when we do sell assets that may have associated built-in gains tax exposure, then we expect to make appropriate provision for the associated tax liabilities on our financial statements.
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If we acquire a corporation in a transaction where we succeed to its tax attributes, to preserve our qualification for taxation as a REIT we must generally distribute all of the C corporation earnings and profits inherited in that acquisition, if any, no later than the end of our taxable year in which the acquisition occurs. However, if we fail to do so, relief provisions would allow us to maintain our qualification for taxation as a REIT provided we distribute any subsequently discovered C corporation earnings and profits and pay an interest charge in respect of the period of delayed distribution.
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Our subsidiaries that are C corporations, including our “taxable REIT subsidiaries”, as defined in Section 856(l) of the IRC, or TRSs, generally will be required to pay federal corporate income tax on their earnings, and a 100% tax may be imposed on any transaction between us and one of our TRSs that does not reflect arm’s length terms.
|
|
•
|
If it is determined that SIR or FPO failed to satisfy one or more of the REIT tests described below before their respective mergers into us, the IRS might allow us, as successor to SIR or FPO, the same opportunity for relief as though we were the remediating REIT. In such case, SIR or FPO, as applicable, would be deemed to have retained its qualification for taxation as a REIT and the relevant penalties or sanctions for remediation would fall upon us in a manner comparable to the above.
|
|
(1)
|
that is managed by one or more trustees or directors;
|
|
(2)
|
the beneficial ownership of which is evidenced by transferable shares or by transferable certificates of beneficial interest;
|
|
(3)
|
that would be taxable, but for Sections 856 through 859 of the IRC, as a domestic C corporation;
|
|
(4)
|
that is not a financial institution or an insurance company subject to special provisions of the IRC;
|
|
(5)
|
the beneficial ownership of which is held by 100 or more persons;
|
|
(6)
|
that is not “closely held,” meaning that during the last half of each taxable year, not more than 50% in value of the outstanding shares are owned, directly or indirectly, by five or fewer “individuals” (as defined in the IRC to include specified tax-exempt entities); and
|
|
(7)
|
that meets other tests regarding the nature of its income and assets and the amount of its distributions, all as described below.
|
|
•
|
The amount of rent received generally must not be based on the income or profits of any person, but may be based on a fixed percentage or percentages of receipts or sales.
|
|
•
|
Rents do not qualify if the REIT owns 10% or more by vote or value of stock of the tenant (or 10% or more of the interests in the assets or net profits of the tenant, if the tenant is not a corporation), whether directly or after application of attribution rules. We generally do not intend to lease property to any party if rents from that property would not qualify as “rents from real property,” but application of the 10% ownership rule is dependent upon complex attribution rules and circumstances that may be beyond our control. Our declaration of trust generally disallows transfers or purported acquisitions, directly or by attribution, of our shares to the extent necessary to maintain our qualification for taxation as a REIT under the IRC. Nevertheless, we cannot be sure that these restrictions will be effective to prevent our qualification for taxation as a REIT from being jeopardized under the 10% affiliated tenant rule. Furthermore, we cannot be sure that we will be able to monitor and enforce these restrictions, nor will our shareholders necessarily be aware of ownership of our shares attributed to them under the IRC’s attribution rules.
|
|
•
|
There is a limited exception to the above prohibition on earning “rents from real property” from a 10% affiliated tenant where the tenant is a TRS. If at least 90% of the leased space of a property is leased to tenants other than TRSs and 10% affiliated tenants, and if the TRS’s rent to the REIT for space at that property is substantially comparable to the rents paid by nonaffiliated tenants for comparable space at the property, then otherwise qualifying rents paid by the TRS to the REIT will not be disqualified on account of the rule prohibiting 10% affiliated tenants.
|
|
•
|
In order for rents to qualify, we generally must not manage the property or furnish or render services to the tenants of the property, except through an independent contractor from whom we derive no income or through one of our TRSs. There is an exception to this rule permitting a REIT to perform customary management and tenant services of the sort that a tax-exempt organization could perform without being considered in receipt of “unrelated business taxable income” as defined in Section 512(b)(3) of the IRC, or UBTI. In addition, a de minimis amount of noncustomary services will not disqualify income as “rents from real property” as long as the value of the impermissible tenant services does not exceed 1% of the gross income from the property.
|
|
•
|
If rent attributable to personal property leased in connection with a lease of real property is 15% or less of the total rent received under the lease, then the rent attributable to personal property will qualify as “rents from real property”; if this 15% threshold is exceeded, the rent attributable to personal property will not so qualify. The portion of rental income treated as attributable to personal property is determined according to the ratio of the fair market value of the personal property to the total fair market value of the real and personal property that is rented.
|
|
•
|
In addition, “rents from real property” includes both charges we receive for services customarily rendered in connection with the rental of comparable real property in the same geographic area, even if the charges are separately
|
|
•
|
that is acquired by a REIT as a result of the REIT having bid on such property at foreclosure, or having otherwise reduced such property to ownership or possession by agreement or process of law, after there was a default or when default was imminent on a lease of such property or on indebtedness that such property secured;
|
|
•
|
for which any related loan acquired by the REIT was acquired at a time when the default was not imminent or anticipated; and
|
|
•
|
for which the REIT makes a proper election to treat the property as foreclosure property.
|
|
•
|
on which a lease is entered into for the property that, by its terms, will give rise to income that does not qualify for purposes of the 75% gross income test (disregarding income from foreclosure property), or any nonqualified income under the 75% gross income test is received or accrued by the REIT, directly or indirectly, pursuant to a lease entered into on or after such day;
|
|
•
|
on which any construction takes place on the property, other than completion of a building or any other improvement where more than 10% of the construction was completed before default became imminent and other than specifically exempted forms of maintenance or deferred maintenance; or
|
|
•
|
which is more than 90 days after the day on which the REIT acquired the property and the property is used in a trade or business which is conducted by the REIT, other than through an independent contractor from whom the REIT itself does not derive or receive any income or a TRS.
|
|
•
|
At least 75% of the value of our total assets must consist of “real estate assets,” defined as real property (including interests in real property and interests in mortgages on real property or on interests in real property), ancillary personal property to the extent that rents attributable to such personal property are treated as rents from real property in accordance with the rules described above, cash and cash items, shares in other REITs, debt instruments issued by “publicly offered REITs” as defined in Section 562(c)(2) of the IRC, government securities and temporary investments of new capital (that is, any stock or debt instrument that we hold that is attributable to any amount received by us (a) in exchange for our stock or (b) in a public offering of our five-year or longer debt instruments, but in each case only for the one-year period commencing with our receipt of the new capital).
|
|
•
|
Not more than 25% of the value of our total assets may be represented by securities other than those securities that count favorably toward the preceding 75% asset test.
|
|
•
|
Of the investments included in the preceding 25% asset class, the value of any one non-REIT issuer’s securities that we own may not exceed 5% of the value of our total assets. In addition, we may not own more than 10% of the vote or value of any one non-REIT issuer’s outstanding securities, unless the securities are “straight debt” securities or otherwise excepted as discussed below. Our stock and other securities in a TRS are exempted from these 5% and 10% asset tests.
|
|
•
|
Not more than 20% of the value of our total assets may be represented by stock or other securities of our TRSs.
|
|
•
|
Not more than 25% of the value of our total assets may be represented by “nonqualified publicly offered REIT debt instruments” as defined in Section 856(c)(5)(L)(ii) of the IRC.
|
|
(1)
|
the sum of 90% of our “real estate investment trust taxable income” and 90% of our net income after tax, if any, from property received in foreclosure, over
|
|
(2)
|
the amount by which our noncash income (e.g., imputed rental income or income from transactions inadvertently failing to qualify as like-kind exchanges) exceeds 5% of our “real estate investment trust taxable income.”
|
|
(1)
|
long-term capital gains, if any, recognized on the disposition of our shares;
|
|
(2)
|
our distributions designated as long-term capital gain dividends (except to the extent attributable to real estate depreciation recapture, in which case the distributions are subject to a maximum 25% federal income tax rate);
|
|
(3)
|
our dividends attributable to dividend income, if any, received by us from C corporations such as TRSs;
|
|
(4)
|
our dividends attributable to earnings and profits that we inherit from C corporations; and
|
|
(5)
|
our dividends to the extent attributable to income upon which we have paid federal corporate income tax (such as taxes on foreclosure property income or on built-in gains), net of the corporate income taxes thereon.
|
|
(1)
|
we will be taxed at regular corporate capital gains tax rates on retained amounts;
|
|
(2)
|
each of our U.S. shareholders will be taxed on its designated proportionate share of our retained net capital gains as though that amount were distributed and designated as a capital gain dividend;
|
|
(3)
|
each of our U.S. shareholders will receive a credit or refund for its designated proportionate share of the tax that we pay;
|
|
(4)
|
each of our U.S. shareholders will increase its adjusted basis in our shares by the excess of the amount of its proportionate share of these retained net capital gains over the U.S. shareholder’s proportionate share of the tax that we pay; and
|
|
(5)
|
both we and our corporate shareholders will make commensurate adjustments in our respective earnings and profits for federal income tax purposes.
|
|
•
|
provides the U.S. shareholder’s correct taxpayer identification number;
|
|
•
|
certifies that the U.S. shareholder is exempt from backup withholding because (a) it comes within an enumerated exempt category, (b) it has not been notified by the IRS that it is subject to backup withholding, or (c) it has been notified by the IRS that it is no longer subject to backup withholding; and
|
|
•
|
certifies that it is a U.S. citizen or other U.S. person.
|
|
•
|
their investment in our shares or other securities satisfies the diversification requirements of ERISA;
|
|
•
|
the investment is prudent in light of possible limitations on the marketability of our shares;
|
|
•
|
they have authority to acquire our shares or other securities under the applicable governing instrument and Title I of ERISA; and
|
|
•
|
the investment is otherwise consistent with their fiduciary responsibilities.
|
|
•
|
any restriction on or prohibition against any transfer or assignment that would result in a termination or reclassification for federal or state tax purposes, or would otherwise violate any state or federal law or court order;
|
|
•
|
any requirement that advance notice of a transfer or assignment be given to the issuer and any requirement that either the transferor or transferee, or both, execute documentation setting forth representations as to compliance with any restrictions on transfer that are among those enumerated in the regulation as not affecting free transferability, including those described in the preceding clause of this sentence;
|
|
•
|
any administrative procedure that establishes an effective date, or an event prior to which a transfer or assignment will not be effective; and
|
|
•
|
any limitation or restriction on transfer or assignment that is not imposed by the issuer or a person acting on behalf of the issuer.
|
|
•
|
competition from other investors, including publicly traded and private REITs, numerous financial institutions, individuals, foreign investors and other public and private companies;
|
|
•
|
our long term cost of capital;
|
|
•
|
contingencies in our acquisition agreements; and
|
|
•
|
the availability and terms of financing.
|
|
•
|
we do not believe that it is possible to understand fully a property before it is owned and operated for a reasonable period of time, and, notwithstanding pre-acquisition due diligence, we could acquire a property that contains undisclosed defects in design or construction;
|
|
•
|
the market in which an acquired property is located may experience unexpected changes that adversely affect the property’s value;
|
|
•
|
the occupancy of and rents from properties that we acquire may decline during our ownership;
|
|
•
|
property operating costs for our acquired properties may be higher than anticipated and our acquired properties may not yield expected returns;
|
|
•
|
we may acquire properties subject to unknown liabilities and without any recourse, or with limited recourse, such as liability for the cleanup of undisclosed environmental contamination or for claims by tenants, vendors or other persons related to actions taken by former owners of the properties; and
|
|
•
|
acquired properties might require significant management attention that would otherwise be devoted to our other business activities.
|
|
•
|
Government tenants occupying approximately 4.8% of our consolidated rentable square feet and contributing approximately 4.3% of our annualized rental income as of December 31, 2018 have currently exercisable rights to terminate their leases before the stated term of their leases expire.
|
|
•
|
In 2019, 2020, 2021, 2022, 2023, 2024, 2026 and 2028, early termination rights become exercisable by government tenants who currently occupy an additional approximately 1.9%, 2.6%, 0.5%, 0.6%, 0.2%, 0.4%, 0.3% and 0.3% of our consolidated rentable square feet, respectively, and contribute an additional approximately 2.0%, 2.9%, 0.6%, 0.5%, 0.3%, 0.5%, 0.5% and 0.3% of our annualized rental income, respectively, as of December 31, 2018.
|
|
•
|
Pursuant to leases with 20 of our government tenants, these tenants have currently exercisable rights to terminate their leases if their respective legislature or other funding authority does not appropriate rent amounts in their respective annual budgets. These 20 tenants represent approximately 6.7% of our consolidated rentable square feet and 7.1% of our annualized rental income as of December 31, 2018.
|
|
•
|
Investors may consider whether to buy or sell our common shares based upon the distribution rate on our common shares relative to the then prevailing market interest rates. If market interest rates go up, investors may expect a higher distribution rate than we are able to pay, which may increase our cost of capital, or they may sell our common shares and seek alternative investments that offer higher distribution rates. Sales of our common shares may cause a decline in the value of our common shares.
|
|
•
|
Amounts outstanding under our revolving credit facility and term loans require interest to be paid at floating interest rates. When interest rates increase, our interest costs will increase, which could adversely affect our cash flows, our ability to pay principal and interest on our debt, our cost of refinancing our fixed rate debts when they become due and our ability to make or sustain distributions to our shareholders.
|
|
•
|
Property values are often determined, in part, based upon a capitalization of rental income formula. When market interest rates increase, property investors often demand higher capitalization rates and that causes property values to decline. Increases in interest rates could lower the value of our properties and cause the value of our securities to decline.
|
|
•
|
the illiquid nature of real estate markets, which limits our ability to sell our assets rapidly to respond to changing market conditions;
|
|
•
|
the subjectivity of real estate valuations and changes in such valuations over time;
|
|
•
|
current and future adverse national real estate trends, including increasing vacancy rates, declining rental rates and
|
|
•
|
costs that may be incurred relating to property maintenance and repair, and the need to make expenditures due to changes in government regulations; and
|
|
•
|
liabilities and litigations arising from injuries on our properties or otherwise incidental to the ownership of our properties.
|
|
•
|
we may share approval rights over major decisions affecting the ownership or operation of the joint venture and any property owned by the joint venture;
|
|
•
|
we may be required to contribute additional capital if our partners fail to fund their share of any required capital contributions;
|
|
•
|
our joint venture partners may have economic or other business interests or goals that are inconsistent with our business interests or goals and that could affect our ability to lease or release the property, operate the property or maintain our qualification as a REIT;
|
|
•
|
our joint venture partners may be subject to different laws or regulations than us, or may be structured differently than us for tax purposes, which could create conflicts of interest and/or affect our ability to maintain our qualification as a REIT;
|
|
•
|
our ability to sell the interest on advantageous terms when we so desire may be limited or restricted under the terms of the applicable joint venture agreements; and
|
|
•
|
disagreements with our joint venture partners could result in litigation or arbitration that could be expensive and distracting to management and could delay important decisions.
|
|
•
|
the division of our Trustees into three classes, with the term of one class expiring each year, which could delay a change of control of us;
|
|
•
|
limitations on shareholder voting rights with respect to certain actions that are not approved by our Board of Trustees;
|
|
•
|
the authority of our Board of Trustees, and not our shareholders, to adopt, amend or repeal our bylaws and to fill vacancies on our Board of Trustees;
|
|
•
|
shareholder voting standards which require a supermajority for approval of certain actions;
|
|
•
|
the fact that only our Board of Trustees, or, if there are no Trustees, our officers, may call shareholder meetings and that shareholders are not entitled to act without a meeting;
|
|
•
|
required qualifications for an individual to serve as a Trustee and a requirement that certain of our Trustees be “Managing Trustees” and other Trustees be “Independent Trustees,” as defined in our governing documents;
|
|
•
|
limitations on the ability of our shareholders to propose nominees for election as Trustees and propose other business to be considered at a meeting of our shareholders;
|
|
•
|
limitations on the ability of our shareholders to remove our Trustees;
|
|
•
|
the authority of our Board of Trustees to create and issue new classes or series of shares (including shares with voting rights and other rights and privileges that may deter a change in control) and issue additional common shares;
|
|
•
|
restrictions on business combinations between us and an interested shareholder that have not first been approved by our Board of Trustees (including a majority of Trustees not related to the interested shareholder); and the authority of our Board of Trustees, without shareholder approval, to implement certain takeover defenses.
|
|
•
|
actual receipt of an improper benefit or profit in money, property or services; or
|
|
•
|
active and deliberate dishonesty by the Trustee or officer that was established by a final judgment as being material to the cause of action adjudicated.
|
|
•
|
our ability to make or sustain the rate of distributions will be adversely affected if any of the risks described in this Annual Report on Form 10-K occur;
|
|
•
|
our making of distributions is subject to compliance with restrictions contained in our credit agreement and may be subject to restrictions in future debt obligations we may incur; and
|
|
•
|
the timing and amount of any distributions will be determined at the discretion of our Board of Trustees and will depend on various factors that our Board of Trustees deems relevant, including our financial condition, our results of operations, our liquidity, our capital requirements, our FFO, our Normalized FFO, restrictive covenants in our financial or other contractual arrangements, general economic conditions in the United States, requirements under the IRC to remain qualified for taxation as a REIT and restrictions under the laws of Maryland.
|
|
•
|
the extent of investor interest in our securities;
|
|
•
|
the general reputation of REITs and externally managed companies and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate based companies or by other issuers less sensitive to rises in interest rates;
|
|
•
|
our underlying asset value;
|
|
•
|
investor confidence in the stock and bond markets, generally;
|
|
•
|
market interest rates;
|
|
•
|
national economic conditions;
|
|
•
|
changes in tax laws;
|
|
•
|
changes in our credit ratings; and
|
|
•
|
general market conditions.
|
|
Consolidated Properties
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
State
|
|
Number of
Buildings |
|
Undepreciated Carrying Value
(1)
|
|
Depreciated Carrying Value
(1)
|
|
Annualized
Rental Income (2) |
||||||
|
Alabama
|
|
7
|
|
$
|
84,968
|
|
|
$
|
81,802
|
|
|
$
|
20,608
|
|
|
Arizona
|
|
6
|
|
35,886
|
|
|
34,860
|
|
|
8,960
|
|
|||
|
California
|
|
28
|
|
517,886
|
|
|
453,431
|
|
|
79,014
|
|
|||
|
Colorado
|
|
7
|
|
97,576
|
|
|
79,522
|
|
|
20,209
|
|
|||
|
Connecticut
|
|
1
|
|
1,978
|
|
|
1,978
|
|
|
1,281
|
|
|||
|
District of Columbia
|
|
7
|
|
526,967
|
|
|
476,660
|
|
|
60,896
|
|
|||
|
Florida
|
|
3
|
|
56,551
|
|
|
48,054
|
|
|
9,934
|
|
|||
|
Georgia
|
|
10
|
|
200,281
|
|
|
169,325
|
|
|
30,276
|
|
|||
|
Hawaii
(3)
|
|
1
|
|
2,008
|
|
|
2,008
|
|
|
—
|
|
|||
|
Iowa
|
|
1
|
|
10,730
|
|
|
10,730
|
|
|
3,283
|
|
|||
|
Idaho
|
|
3
|
|
33,238
|
|
|
28,367
|
|
|
4,689
|
|
|||
|
Illinois
|
|
5
|
|
98,902
|
|
|
95,801
|
|
|
30,213
|
|
|||
|
Indiana
|
|
5
|
|
95,394
|
|
|
81,969
|
|
|
13,320
|
|
|||
|
Kansas
|
|
2
|
|
20,188
|
|
|
16,879
|
|
|
5,837
|
|
|||
|
Kentucky
|
|
2
|
|
17,329
|
|
|
15,563
|
|
|
3,936
|
|
|||
|
Maryland
|
|
17
|
|
321,799
|
|
|
277,712
|
|
|
45,941
|
|
|||
|
Massachusetts
|
|
8
|
|
109,444
|
|
|
93,966
|
|
|
17,699
|
|
|||
|
Michigan
|
|
2
|
|
27,625
|
|
|
23,695
|
|
|
4,460
|
|
|||
|
Minnesota
|
|
1
|
|
8,222
|
|
|
4,748
|
|
|
1,126
|
|
|||
|
Mississippi
|
|
1
|
|
26,136
|
|
|
22,036
|
|
|
3,997
|
|
|||
|
Missouri
|
|
3
|
|
83,563
|
|
|
77,425
|
|
|
22,835
|
|
|||
|
Nebraska
|
|
2
|
|
19,631
|
|
|
19,631
|
|
|
4,201
|
|
|||
|
New Hampshire
|
|
1
|
|
18,621
|
|
|
15,242
|
|
|
2,439
|
|
|||
|
New Jersey
|
|
4
|
|
94,827
|
|
|
86,818
|
|
|
20,936
|
|
|||
|
New York
|
|
6
|
|
69,142
|
|
|
52,448
|
|
|
11,525
|
|
|||
|
North Carolina
|
|
2
|
|
20,571
|
|
|
20,571
|
|
|
6,483
|
|
|||
|
Ohio
|
|
1
|
|
940
|
|
|
940
|
|
|
725
|
|
|||
|
Oregon
|
|
1
|
|
29,648
|
|
|
24,750
|
|
|
5,162
|
|
|||
|
Pennsylvania
|
|
2
|
|
37,087
|
|
|
37,087
|
|
|
6,959
|
|
|||
|
South Carolina
|
|
4
|
|
21,568
|
|
|
17,233
|
|
|
2,961
|
|
|||
|
Tennessee
|
|
1
|
|
10,565
|
|
|
8,823
|
|
|
2,974
|
|
|||
|
Texas
|
|
19
|
|
437,011
|
|
|
431,991
|
|
|
76,861
|
|
|||
|
Utah
|
|
3
|
|
64,827
|
|
|
64,827
|
|
|
12,663
|
|
|||
|
Vermont
|
|
1
|
|
9,256
|
|
|
7,383
|
|
|
1,129
|
|
|||
|
Virginia
|
|
34
|
|
586,723
|
|
|
558,373
|
|
|
101,596
|
|
|||
|
Washington
|
|
7
|
|
126,002
|
|
|
113,049
|
|
|
19,880
|
|
|||
|
West Virginia
|
|
1
|
|
5,062
|
|
|
2,847
|
|
|
—
|
|
|||
|
Wisconsin
|
|
1
|
|
5,587
|
|
|
4,706
|
|
|
803
|
|
|||
|
Wyoming
|
|
1
|
|
10,897
|
|
|
6,239
|
|
|
2,147
|
|
|||
|
Total
|
|
211
|
|
3,944,636
|
|
|
3,569,489
|
|
|
667,958
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Held for sale
|
|
|
|
|
|
|
|
|
||||||
|
District of Columbia
|
|
1
|
|
46,182
|
|
|
45,734
|
|
|
7,745
|
|
|||
|
Hawaii
(3)
|
|
1
|
|
6,846
|
|
|
6,846
|
|
|
—
|
|
|||
|
Maryland
|
|
27
|
|
122,966
|
|
|
115,886
|
|
|
20,131
|
|
|||
|
Virginia
|
|
7
|
|
40,961
|
|
|
40,318
|
|
|
6,413
|
|
|||
|
|
|
36
|
|
216,955
|
|
|
208,784
|
|
|
34,289
|
|
|||
|
Grand Total
|
|
247
|
|
$
|
4,161,591
|
|
|
$
|
3,778,273
|
|
|
$
|
702,247
|
|
|
(1)
|
Excludes value assigned to real estate intangibles in purchase price allocations.
|
|
(2)
|
Annualized rental income is defined as the annualized contractual base rents from our tenants pursuant to our lease agreements as of
December 31, 2018
, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization.
|
|
(3)
|
Leasable land parcel.
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
Income statement data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Rental income
|
|
$
|
426,560
|
|
|
$
|
316,532
|
|
|
$
|
258,180
|
|
|
$
|
248,549
|
|
|
$
|
251,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Real estate taxes
|
|
49,708
|
|
|
37,942
|
|
|
30,703
|
|
|
29,906
|
|
|
28,389
|
|
|||||
|
Utility expenses
|
|
26,425
|
|
|
20,998
|
|
|
17,269
|
|
|
17,916
|
|
|
19,369
|
|
|||||
|
Other operating expenses
|
|
89,610
|
|
|
65,349
|
|
|
54,290
|
|
|
50,425
|
|
|
45,982
|
|
|||||
|
Depreciation and amortization
|
|
162,488
|
|
|
109,588
|
|
|
73,153
|
|
|
68,696
|
|
|
66,593
|
|
|||||
|
Loss on impairment of real estate
|
|
8,630
|
|
|
9,490
|
|
|
—
|
|
|
—
|
|
|
2,016
|
|
|||||
|
Acquisition and transaction related costs
|
|
14,508
|
|
|
—
|
|
|
1,191
|
|
|
811
|
|
|
1,344
|
|
|||||
|
General and administrative
|
|
24,922
|
|
|
18,847
|
|
|
14,897
|
|
|
14,826
|
|
|
15,809
|
|
|||||
|
Total expenses
|
|
376,291
|
|
|
262,214
|
|
|
191,503
|
|
|
182,580
|
|
|
179,502
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Gain on sale of real estate
|
|
20,661
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|||||
|
Dividend income
|
|
1,337
|
|
|
1,216
|
|
|
971
|
|
|
811
|
|
|
—
|
|
|||||
|
Unrealized loss on equity securities
|
|
(7,552
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Interest income
|
|
639
|
|
|
1,962
|
|
|
158
|
|
|
14
|
|
|
69
|
|
|||||
|
Interest expense
|
|
(89,865
|
)
|
|
(65,406
|
)
|
|
(45,060
|
)
|
|
(37,008
|
)
|
|
(28,048
|
)
|
|||||
|
Gain (loss) on early extinguishment of debt
|
|
(709
|
)
|
|
(1,715
|
)
|
|
104
|
|
|
34
|
|
|
(1,307
|
)
|
|||||
|
Loss on distribution to common shareholders of The RMR Group Inc. common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,368
|
)
|
|
—
|
|
|||||
|
Income (loss) from continuing operations before income taxes and equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
in net earnings (losses) of investees
|
|
(25,220
|
)
|
|
(9,625
|
)
|
|
22,929
|
|
|
17,452
|
|
|
42,243
|
|
|||||
|
Income tax expense
|
|
(117
|
)
|
|
(101
|
)
|
|
(101
|
)
|
|
(86
|
)
|
|
(117
|
)
|
|||||
|
Equity in net earnings (losses) of investees
|
|
(2,269
|
)
|
|
(13
|
)
|
|
137
|
|
|
20
|
|
|
87
|
|
|||||
|
Income (loss) from continuing operations
|
|
(27,606
|
)
|
|
(9,739
|
)
|
|
22,965
|
|
|
17,386
|
|
|
42,213
|
|
|||||
|
Income (loss) from discontinued operations
|
|
5,722
|
|
|
21,829
|
|
|
34,878
|
|
|
(227,347
|
)
|
|
14,321
|
|
|||||
|
Net income (loss)
|
|
(21,884
|
)
|
|
12,090
|
|
|
57,843
|
|
|
(209,961
|
)
|
|
56,534
|
|
|||||
|
Preferred units of limited partnership distributions
|
|
(371
|
)
|
|
(275
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Net income (loss) available for common shareholders
|
|
$
|
(22,255
|
)
|
|
$
|
11,815
|
|
|
$
|
57,843
|
|
|
$
|
(209,961
|
)
|
|
$
|
56,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Weighted average common shares outstanding (basic)
|
|
24,830
|
|
|
21,158
|
|
|
17,763
|
|
|
17,675
|
|
|
15,328
|
|
|||||
|
Weighted average common shares outstanding (diluted)
|
|
24,830
|
|
|
21,158
|
|
|
17,768
|
|
|
17,675
|
|
|
15,350
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Per common share amounts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Income (loss) from continuing operations (basic and diluted)
|
|
$
|
(1.13
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
1.29
|
|
|
$
|
0.98
|
|
|
$
|
2.75
|
|
|
Income (loss) from discontinued operations (basic and diluted)
|
|
$
|
0.23
|
|
|
$
|
1.03
|
|
|
$
|
1.96
|
|
|
$
|
(12.86
|
)
|
|
$
|
0.93
|
|
|
Net income (loss) available for common shareholders (basic)
|
|
$
|
(0.90
|
)
|
|
$
|
0.56
|
|
|
$
|
3.26
|
|
|
$
|
(11.88
|
)
|
|
$
|
3.69
|
|
|
Net income (loss) available for common shareholders (diluted)
|
|
$
|
(0.90
|
)
|
|
$
|
0.56
|
|
|
$
|
3.26
|
|
|
$
|
(11.88
|
)
|
|
$
|
3.68
|
|
|
Common distributions paid
|
|
$
|
6.88
|
|
|
$
|
6.88
|
|
|
$
|
6.88
|
|
|
$
|
6.88
|
|
(1)
|
$
|
6.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
As of December 31,
|
||||||||||||||||||
|
Balance sheet data:
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
Total real estate investments, gross
(2)
|
|
$
|
3,944,636
|
|
|
$
|
2,975,721
|
|
|
$
|
1,888,760
|
|
|
$
|
1,696,132
|
|
|
$
|
1,682,480
|
|
|
Real estate investments, net
(2)
|
|
3,569,489
|
|
|
2,633,873
|
|
|
1,591,956
|
|
|
1,440,253
|
|
|
1,462,689
|
|
|||||
|
Total assets
|
|
5,238,583
|
|
|
3,703,565
|
|
|
2,385,066
|
|
|
2,168,510
|
|
|
2,419,908
|
|
|||||
|
Debt, net
|
|
3,254,890
|
|
|
2,245,092
|
|
|
1,381,852
|
|
|
1,145,598
|
|
|
1,077,410
|
|
|||||
|
Shareholders' equity
|
|
1,778,968
|
|
|
1,330,043
|
|
|
935,004
|
|
|
956,651
|
|
|
1,297,449
|
|
|||||
|
(1)
|
Excludes a non-cash distribution of $0.5136 per share related to the distribution of shares of RMR Inc. class A common stock to our shareholders on December 14, 2015.
|
|
(2)
|
Excludes properties classified as assets held for sale or discontinued operations and properties owned by unconsolidated joint ventures.
|
|
|
|
All
Consolidated Properties
(1)
|
|
Comparable
Consolidated Properties
(2)
|
||||||||
|
|
|
December 31,
|
|
December 31,
|
||||||||
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
|
Total buildings
(3)
|
|
247
|
|
|
167
|
|
|
90
|
|
|
90
|
|
|
Total rentable square feet
(4)
|
|
31,900
|
|
|
17,499
|
|
|
10,904
|
|
|
10,868
|
|
|
Percent leased
(5)
|
|
91.0
|
%
|
|
94.2
|
%
|
|
94.0
|
%
|
|
95.0
|
%
|
|
(1)
|
Based on consolidated properties we owned on
December 31, 2018
and
2017
, respectively. 2018 includes the properties acquired in the SIR Merger.
|
|
(2)
|
Based on consolidated properties we owned on
December 31, 2018
and which we owned continuously since January 1, 2017. Excludes the properties acquired in the SIR Merger.
|
|
(3)
|
Includes two leasable land parcels.
|
|
(4)
|
Subject to changes when space is re-measured or re-configured for tenants.
|
|
(5)
|
Percent leased includes (i) space being fitted out for tenant occupancy pursuant to our lease agreements, if any, and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants, if any, as of the measurement date.
|
|
|
|
Year Ended December 31,
|
||||||
|
Average effective rental rate per square foot
(1)
:
|
|
2018
|
|
2017
|
||||
|
All properties
(2)
|
|
$
|
29.23
|
|
|
$
|
25.99
|
|
|
Comparable properties
(3)
|
|
$
|
25.74
|
|
|
$
|
25.34
|
|
|
(1)
|
Average effective rental rate per square foot represents total rental income during the period specified divided by the average rentable square feet leased during the period specified. Excludes the properties acquired in the SIR Merger.
|
|
(2)
|
Based on consolidated properties we owned on
December 31, 2018
and 2017, respectively.
|
|
(3)
|
Based on consolidated properties we owned on
December 31, 2018
and which we owned continuously since January 1, 2017.
|
|
|
|
Year Ended December 31, 2018
|
|||||||
|
|
|
Leased
|
|
Available
for Lease
|
|
Total
|
|||
|
Beginning of year
|
|
16,477
|
|
|
1,022
|
|
|
17,499
|
|
|
Changes resulting from:
|
|
|
|
|
|
|
|
|
|
|
Acquisition of properties (including the properties acquired in the SIR Merger)
|
|
14,771
|
|
|
1,767
|
|
|
16,538
|
|
|
Disposition of properties
|
|
(2,022
|
)
|
|
(153
|
)
|
|
(2,175
|
)
|
|
Lease expirations
|
|
(1,611
|
)
|
|
1,611
|
|
|
—
|
|
|
Lease renewals
(1)
|
|
981
|
|
|
(981
|
)
|
|
—
|
|
|
New leases
(1)
|
|
428
|
|
|
(402
|
)
|
|
26
|
|
|
Re-measurements
(2)
|
|
—
|
|
|
12
|
|
|
12
|
|
|
End of year
|
|
29,024
|
|
|
2,876
|
|
|
31,900
|
|
|
(1)
|
Based on leases entered during the
year ended
December 31, 2018
and an expansion of
26
rentable square feet completed at an existing property during the first quarter of 2018.
|
|
(2)
|
Rentable square feet are subject to changes when space is re-measured or re-configured for tenants.
|
|
|
|
Year Ended December 31, 2018
(1)
|
|||||
|
|
|
Old Effective
Rent Per
Square Foot
(2)
|
|
New Effective
Rent Per
Square Foot
(2)
|
|
Rentable
Square Feet
|
|
|
New leases
|
|
$21.06
|
|
$24.21
|
|
330
|
|
|
Lease renewals
|
|
$27.58
|
|
$27.40
|
|
1,015
|
|
|
Total leasing activity
|
|
$25.98
|
|
$26.61
|
|
1,345
|
|
|
(1)
|
Excludes the properties acquired in the SIR Merger.
|
|
(2)
|
Effective rental rate includes contractual base rents from our tenants pursuant to our lease agreements, plus straight line rent adjustments and estimated expense reimbursements to be paid to us, and excluding lease value amortization.
|
|
|
|
Year Ended December 31, 2018
(1)
|
||||||||||
|
|
|
New Leases
|
|
Renewals
|
|
Total
|
||||||
|
Rentable square feet leased during the year
|
|
402
|
|
|
981
|
|
|
1,383
|
|
|||
|
Tenant leasing costs and concession commitments
(2)
|
|
$
|
17,130
|
|
|
$
|
20,005
|
|
|
$
|
37,135
|
|
|
Tenant leasing costs and concession commitments per rentable square foot
(2)
|
|
$
|
42.61
|
|
|
$
|
20.40
|
|
|
$
|
26.85
|
|
|
Weighted (by square feet) average lease term (years)
|
|
6.7
|
|
|
6.8
|
|
|
6.8
|
|
|||
|
Total leasing costs and concession commitments per rentable square foot per year
(2)
|
|
$
|
6.36
|
|
|
$
|
2.98
|
|
|
$
|
3.95
|
|
|
(1)
|
Excludes the properties acquired in the SIR Merger.
|
|
(2)
|
Includes commitments made for leasing expenditures and concessions, such as tenant improvements, leasing commissions, tenant reimbursements and free rent.
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2018
(1)
|
|
2017
|
||||
|
Tenant improvements
(2)
|
|
$
|
14,440
|
|
|
$
|
16,050
|
|
|
Leasing costs
(3)
|
|
$
|
11,078
|
|
|
$
|
5,796
|
|
|
Building improvements
(4)
|
|
$
|
24,712
|
|
|
$
|
15,435
|
|
|
Development, redevelopment and other activities
(5)
|
|
$
|
3,962
|
|
|
$
|
21,553
|
|
|
(1)
|
Excludes the properties acquired in the SIR Merger.
|
|
(2)
|
Tenant improvements include capital expenditures used to improve tenants’ space or amounts paid directly to tenants to improve their space.
|
|
(3)
|
Leasing costs include leasing related costs, such as brokerage commissions and other tenant inducements.
|
|
(4)
|
Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets.
|
|
(5)
|
Development, redevelopment and other activities generally include (i) capital expenditures that are identified at the time of a property acquisition and incurred within a short time period after acquiring the property, and (ii) capital expenditure projects that reposition a property or result in new sources of revenue.
|
|
Year
(1)
|
|
Number of Leases Expiring
|
|
Expirations of Leased Square Feet
(2)
|
|
Percent of Total
|
|
Cumulative Percent of Total
|
|
Annualized Rental Income Expiring
|
|
Percent of Total
|
|
Cumulative Percent of Total
|
||
|
2019
|
|
107
|
|
3,203
|
|
11.0%
|
|
11.0%
|
|
$
|
90,837
|
|
|
12.9%
|
|
12.9%
|
|
2020
|
|
85
|
|
1,956
|
|
6.7%
|
|
17.7%
|
|
50,152
|
|
|
7.1%
|
|
20.0%
|
|
|
2021
|
|
85
|
|
2,214
|
|
7.6%
|
|
25.3%
|
|
48,938
|
|
|
7.0%
|
|
27.0%
|
|
|
2022
|
|
93
|
|
2,589
|
|
8.9%
|
|
34.2%
|
|
63,965
|
|
|
9.1%
|
|
36.1%
|
|
|
2023
|
|
78
|
|
3,128
|
|
10.8%
|
|
45.0%
|
|
77,082
|
|
|
11.0%
|
|
47.1%
|
|
|
2024
|
|
62
|
|
3,709
|
|
12.8%
|
|
57.8%
|
|
95,269
|
|
|
13.6%
|
|
60.7%
|
|
|
2025
|
|
40
|
|
2,229
|
|
7.7%
|
|
65.5%
|
|
47,387
|
|
|
6.7%
|
|
67.4%
|
|
|
2026
|
|
36
|
|
2,056
|
|
7.1%
|
|
72.6%
|
|
52,096
|
|
|
7.4%
|
|
74.8%
|
|
|
2027
|
|
35
|
|
1,899
|
|
6.5%
|
|
79.1%
|
|
46,558
|
|
|
6.6%
|
|
81.4%
|
|
|
2028 and thereafter
|
|
47
|
|
6,041
|
|
20.9%
|
|
100.0%
|
|
129,963
|
|
|
18.6%
|
|
100.0%
|
|
|
Total
|
|
668
|
|
29,024
|
|
100.0%
|
|
|
|
$
|
702,247
|
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Weighted average remaining lease term (in years)
|
6.0
|
|
|
|
|
|
5.7
|
|
|
|
|
|||||
|
(1)
|
Includes the properties acquired in the SIR Merger. The year of lease expiration is pursuant to current contract terms. Some tenants have the right to vacate their space before the stated expirations of their leases. As of
December 31, 2018
, tenants occupying approximately
9.6%
of our consolidated rentable square feet and responsible for approximately
5.4%
of our annualized rental income as of
December 31, 2018
, currently have exercisable rights to terminate their leases before the stated terms of their leases expire. Also, in
2019
,
2020
,
2021
,
2022
,
2023
,
2024
,
2025
,
2026
and
2028
, early termination rights become exercisable by other tenants who currently occupy an additional approximately
2.4%
,
5.1%
,
1.5%
,
2.3%
,
0.3%
,
0.6%
,
1.7%
,
0.7%
and
0.8%
of our consolidated rentable square feet, respectively, and contribute an additional approximately
2.5%
,
6.2%
,
2.1%
,
2.0%
,
0.4%
,
0.8%
,
2.8%
,
0.9%
and
0.8%
of our annualized rental income, respectively, as of
December 31, 2018
. In addition, as of
December 31, 2018
,
22
of our tenants have currently exercisable rights to terminate their leases if the legislature or other funding authority does not appropriate rent amounts in their respective annual budgets. These
22
tenants occupy approximately
6.8%
of our consolidated rentable square feet and contribute approximately
7.2%
of our annualized rental income as of
December 31, 2018
.
|
|
(2)
|
Leased square feet is pursuant to leases existing as of
December 31, 2018
, and includes (i) space being fitted out for tenant occupancy pursuant to our lease agreements, if any, and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants, if any. Square feet measurements are subject to changes when space is re-measured or re-configured for new tenants.
|
|
|
Tenant
|
|
Credit Rating
|
|
Annualized
Rental Income
|
|
% of Total Annualized Rental Income
|
||||
|
1
|
|
U.S. Government
|
|
Investment Grade
|
|
$
|
179,620
|
|
|
25.6
|
%
|
|
2
|
|
State of California
|
|
Investment Grade
|
|
18,933
|
|
|
2.7
|
%
|
|
|
3
|
|
Shook, Hardy & Bacon L.L.P.
|
|
Not Rated
|
|
18,574
|
|
|
2.6
|
%
|
|
|
4
|
|
Bank of America Corporation
|
|
Investment Grade
|
|
16,283
|
|
|
2.3
|
%
|
|
|
5
|
|
Noble Energy, Inc.
|
|
Investment Grade
|
|
14,722
|
|
|
2.1
|
%
|
|
|
6
|
|
F5 Networks, Inc.
|
|
Not Rated
|
|
14,238
|
|
|
2.0
|
%
|
|
|
7
|
|
Andeavor
|
|
Investment Grade
|
|
14,141
|
|
|
2.0
|
%
|
|
|
8
|
|
WestRock Co.
|
|
Investment Grade
|
|
12,837
|
|
|
1.8
|
%
|
|
|
9
|
|
Northrop Grumman Corporation
|
|
Investment Grade
|
|
11,375
|
|
|
1.6
|
%
|
|
|
10
|
|
CareFirst Inc.
|
|
Non Investment Grade
|
|
11,265
|
|
|
1.6
|
%
|
|
|
11
|
|
Tyson Foods, Inc.
|
|
Investment Grade
|
|
10,058
|
|
|
1.4
|
%
|
|
|
12
|
|
Technicolor SA
|
|
Non Investment Grade
|
|
10,033
|
|
|
1.4
|
%
|
|
|
13
|
|
Commonwealth of Massachusetts
|
|
Investment Grade
|
|
9,693
|
|
|
1.4
|
%
|
|
|
14
|
|
Micro Focus International plc
|
|
Non Investment Grade
|
|
8,710
|
|
|
1.2
|
%
|
|
|
15
|
|
ARRIS International plc
|
|
Non Investment Grade
|
|
7,913
|
|
|
1.1
|
%
|
|
|
16
|
|
PNC Bank
|
|
Investment Grade
|
|
6,959
|
|
|
1.1
|
%
|
|
|
17
|
|
Allstate Insurance Co.
|
|
Investment Grade
|
|
6,816
|
|
|
1.1
|
%
|
|
|
18
|
|
State of Georgia
|
|
Investment Grade
|
|
6,727
|
|
|
1.0
|
%
|
|
|
|
|
|
|
|
$
|
378,897
|
|
|
54.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired Properties Results
(2)
|
|
Disposed Properties Results
(3)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
|
|
Comparable Properties Results
(1)
|
|
Year Ended
|
|
Year Ended
|
|
Consolidated Results
|
||||||||||||||||||||||||||||||||||||||
|
|
|
Year Ended December 31,
|
|
December 31,
|
|
December 31,
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
%
|
||||||||||||||||||||||
|
|
|
2018
|
|
2017
|
|
Change
|
|
Change
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Change
|
|
Change
|
||||||||||||||||||||||
|
Rental income
|
|
$
|
263,499
|
|
|
$
|
260,024
|
|
|
$
|
3,475
|
|
|
1.3
|
%
|
|
$
|
132,868
|
|
|
$
|
32,587
|
|
|
$
|
30,193
|
|
|
$
|
23,921
|
|
|
$
|
426,560
|
|
|
$
|
316,532
|
|
|
$
|
110,028
|
|
|
34.8
|
%
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Real estate taxes
|
|
30,977
|
|
|
30,189
|
|
|
788
|
|
|
2.6
|
%
|
|
15,489
|
|
|
4,042
|
|
|
3,242
|
|
|
3,711
|
|
|
49,708
|
|
|
37,942
|
|
|
11,766
|
|
|
31.0
|
%
|
||||||||||
|
Utility expenses
|
|
18,189
|
|
|
17,647
|
|
|
542
|
|
|
3.1
|
%
|
|
6,745
|
|
|
2,180
|
|
|
1,491
|
|
|
1,171
|
|
|
26,425
|
|
|
20,998
|
|
|
5,427
|
|
|
25.8
|
%
|
||||||||||
|
Other operating expenses
|
|
56,949
|
|
|
55,415
|
|
|
1,534
|
|
|
2.8
|
%
|
|
26,591
|
|
|
5,785
|
|
|
6,070
|
|
|
4,149
|
|
|
89,610
|
|
|
65,349
|
|
|
24,261
|
|
|
37.1
|
%
|
||||||||||
|
Total operating expenses
|
|
106,115
|
|
|
103,251
|
|
|
2,864
|
|
|
2.8
|
%
|
|
48,825
|
|
|
12,007
|
|
|
10,803
|
|
|
9,031
|
|
|
165,743
|
|
|
124,289
|
|
|
41,454
|
|
|
33.4
|
%
|
||||||||||
|
Net operating income
(4)
|
|
$
|
157,384
|
|
|
$
|
156,773
|
|
|
$
|
611
|
|
|
0.4
|
%
|
|
$
|
84,043
|
|
|
$
|
20,580
|
|
|
$
|
19,390
|
|
|
$
|
14,890
|
|
|
260,817
|
|
|
192,243
|
|
|
68,574
|
|
|
35.7
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Other expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Depreciation and amortization
|
|
|
|
|
|
162,488
|
|
|
109,588
|
|
|
52,900
|
|
|
48.3
|
%
|
||||||||||||||||||||||||||||||
|
Loss on impairment of real estate
|
|
|
|
|
|
8,630
|
|
|
9,490
|
|
|
(860
|
)
|
|
(9.1
|
%)
|
||||||||||||||||||||||||||||||
|
Acquisition and transaction related costs
|
|
|
|
|
|
14,508
|
|
|
—
|
|
|
14,508
|
|
|
nm
|
|
||||||||||||||||||||||||||||||
|
General and administrative
|
|
|
|
|
|
24,922
|
|
|
18,847
|
|
|
6,075
|
|
|
32.2
|
%
|
||||||||||||||||||||||||||||||
|
Total other expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
210,548
|
|
|
137,925
|
|
|
72,623
|
|
|
52.7
|
%
|
||||||||||||||||||
|
Gain on sale of real estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,661
|
|
|
—
|
|
|
20,661
|
|
|
nm
|
|
||||||||||||||||||
|
Dividend income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,337
|
|
|
1,216
|
|
|
121
|
|
|
10.0
|
%
|
||||||||||||||||||
|
Unrealized loss on equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,552
|
)
|
|
—
|
|
|
(7,552
|
)
|
|
nm
|
|
||||||||||||||||||
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
639
|
|
|
1,962
|
|
|
(1,323
|
)
|
|
(67.4
|
%)
|
||||||||||||||||||
|
Interest expense
|
|
(89,865
|
)
|
|
(65,406
|
)
|
|
(24,459
|
)
|
|
37.4
|
%
|
||||||||||||||||||||||||||||||||||
|
Loss on early extinguishment of debt
|
|
|
|
|
|
(709
|
)
|
|
(1,715
|
)
|
|
1,006
|
|
|
(58.7
|
%)
|
||||||||||||||||||||||||||||||
|
Loss from continuing operations before income taxes and equity in net losses of investees
|
|
(25,220
|
)
|
|
(9,625
|
)
|
|
(15,595
|
)
|
|
162.0
|
%
|
||||||||||||||||||||||||||||||||||
|
Income tax expense
|
|
(117
|
)
|
|
(101
|
)
|
|
(16
|
)
|
|
15.8
|
%
|
||||||||||||||||||||||||||||||||||
|
Equity in net losses of investees
|
|
(2,269
|
)
|
|
(13
|
)
|
|
(2,256
|
)
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Loss from continuing operations
|
|
(27,606
|
)
|
|
(9,739
|
)
|
|
(17,867
|
)
|
|
183.5
|
%
|
||||||||||||||||||||||||||||||||||
|
Income from discontinued operations
|
|
5,722
|
|
|
21,829
|
|
|
(16,107
|
)
|
|
(73.8
|
%)
|
||||||||||||||||||||||||||||||||||
|
Net income (loss)
|
|
(21,884
|
)
|
|
12,090
|
|
|
(33,974
|
)
|
|
(281.0
|
%)
|
||||||||||||||||||||||||||||||||||
|
Preferred units of limited partnership distributions
|
|
(371
|
)
|
|
(275
|
)
|
|
(96
|
)
|
|
34.9
|
%
|
||||||||||||||||||||||||||||||||||
|
Net income (loss) available for common shareholders
|
|
$
|
(22,255
|
)
|
|
$
|
11,815
|
|
|
$
|
(34,070
|
)
|
|
(288.4
|
%)
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Weighted average common shares outstanding (basic and diluted)
|
|
24,830
|
|
|
21,158
|
|
|
3,672
|
|
|
17.4 %
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Per common share amounts (basic and diluted):
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Loss from continuing operations
|
|
$
|
(1.13
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
(0.66
|
)
|
|
140.4
|
%
|
|||||||||||||||||||||||||||||||
|
Income from discontinued operations
|
|
$
|
0.23
|
|
|
$
|
1.03
|
|
|
$
|
(0.80
|
)
|
|
(77.7
|
%)
|
|||||||||||||||||||||||||||||||
|
Net income (loss) available for common shareholders
|
|
$
|
(0.90
|
)
|
|
$
|
0.56
|
|
|
$
|
(1.46
|
)
|
|
(260.7
|
%)
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Reconciliation of Net Income (Loss) Available for Common Shareholders to Consolidated Property NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Net income (loss) available for common shareholders
|
|
|
|
|
|
$
|
(22,255
|
)
|
|
$
|
11,815
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Preferred units of limited partnership distributions
|
|
|
|
|
|
371
|
|
|
275
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Net income (loss)
|
|
|
|
|
|
(21,884
|
)
|
|
12,090
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Income from discontinued operations
|
|
|
|
|
|
(5,722
|
)
|
|
(21,829
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Loss from continuing operations
|
|
|
|
|
|
(27,606
|
)
|
|
(9,739
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Equity in net losses of investees
|
|
|
|
|
|
2,269
|
|
|
13
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Income tax expense
|
|
|
|
|
|
117
|
|
|
101
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Loss from continuing operations before income taxes and equity in net losses of investees
|
|
|
|
|
|
(25,220
|
)
|
|
(9,625
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Loss on early extinguishment of debt
|
|
|
|
|
|
709
|
|
|
1,715
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Interest expense
|
|
|
|
|
|
89,865
|
|
|
65,406
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Interest income
|
|
|
|
|
|
(639
|
)
|
|
(1,962
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Unrealized loss on equity securities
|
|
|
|
|
|
7,552
|
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Dividend income
|
|
|
|
|
|
(1,337
|
)
|
|
(1,216
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Gain on sale of real estate
|
|
|
|
|
|
(20,661
|
)
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
General and administrative
|
|
|
|
|
|
24,922
|
|
|
18,847
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Acquisition and transaction related costs
|
|
|
|
|
|
14,508
|
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Loss on impairment of real estate
|
|
|
|
|
|
8,630
|
|
|
9,490
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Depreciation and amortization
|
|
|
|
|
|
162,488
|
|
|
109,588
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Consolidated Property NOI
|
|
|
|
|
|
$
|
260,817
|
|
|
$
|
192,243
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Calculation of Funds From Operations Available for Common Shareholders and Normalized Funds From Operations Available for Common Shareholders
(5)
|
||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
||||||||||||||||||||||
|
Net income (loss) available for common shareholders
|
|
|
|
|
|
$
|
(22,255
|
)
|
|
$
|
11,815
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Add (less): Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Consolidated properties
|
|
|
|
|
|
162,488
|
|
|
109,588
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Unconsolidated joint venture properties
|
|
|
|
|
|
8,203
|
|
|
2,185
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
FFO attributable to Select Income REIT
|
|
|
|
|
|
51,773
|
|
|
58,279
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Loss on impairment of real estate
|
|
|
|
|
|
8,630
|
|
|
9,490
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Equity in earnings from Select Income REIT included in discontinued operations
|
|
|
|
|
|
(24,358
|
)
|
|
(21,584
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Increase in carrying value of property included in discontinued operations
|
|
|
|
|
|
—
|
|
|
(619
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Gain on sale of real estate
|
|
|
|
|
|
(20,661
|
)
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Funds from operations available for common shareholders
|
|
|
|
|
|
163,820
|
|
|
169,154
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Add (less): Acquisition and transaction related costs
|
|
|
|
|
|
14,508
|
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Loss on early extinguishment of debt
|
|
|
|
|
|
709
|
|
|
1,715
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Normalized FFO attributable to Select Income REIT
|
|
|
|
|
|
44,006
|
|
|
58,580
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
FFO attributable to Select Income REIT
|
|
|
|
|
|
(51,773
|
)
|
|
(58,279
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Unrealized loss on equity securities
|
|
|
|
|
|
7,552
|
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Net gain on issuance of shares by Select Income REIT included in discontinued operations
|
|
|
|
|
|
(29
|
)
|
|
(72
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Loss on sale of Select Income REIT shares included in discontinued operations
|
|
|
|
|
|
18,665
|
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Normalized funds from operations available for common shareholders
|
|
|
|
|
|
$
|
197,458
|
|
|
$
|
171,098
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Funds from operations available for common shareholders per common share (basic and diluted)
|
|
|
|
|
|
$
|
6.60
|
|
|
$
|
7.99
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Normalized funds from operations available for common shareholders per common share (basic and diluted)
|
|
|
|
|
|
$
|
7.95
|
|
|
$
|
8.09
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
(1)
|
Comparable properties consists of
90
buildings we owned on
December 31, 2018
and which we owned continuously since January 1, 2017.
|
|
(2)
|
Acquired properties consist of
157
buildings we acquired since January 1, 2017 and which we owned as of December 31, 2018. On
December 31, 2018
, we acquired 99 of these buildings in connection with the SIR Merger. In October 2017, we acquired 57 of these buildings in connection with the FPO Transaction. We acquired one of these buildings in a separate transaction during 2017.
|
|
(3)
|
Disposed properties consist of one building which we sold in October 2017 and 19 buildings which we sold during the year ended
December 31, 2018
. Excludes one building classified as discontinued operations which we sold in August 2017.
|
|
(4)
|
The calculation of Consolidated Property Net Operating Income, or NOI, excludes certain components of net income (loss) available for common shareholders in order to provide results that are more closely related to our consolidated property level results of operations. We define Consolidated Property NOI as consolidated income from our rental of real estate less our consolidated property operating expenses. Consolidated Property NOI excludes amortization of capitalized tenant improvement costs and leasing commissions that we record as depreciation and amortization. We consider Consolidated Property NOI to be an appropriate supplemental measure to net income (loss) available for common shareholders because it may help both investors and management to understand the operations of our consolidated properties. We use Consolidated Property NOI to evaluate individual and company wide consolidated property level performance, and we believe that Consolidated Property NOI provides useful information to investors regarding our results of operations because it reflects only those income and expense items that are generated and incurred at the property level and may facilitate comparisons of our operating performance between periods and with other REITs. Consolidated Property NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income (loss) or net income (loss) available for common shareholders as an indicator of our operating performance or as a measure of our liquidity. This measure should be considered in conjunction with net income (loss) and net income (loss) available for common shareholders as presented in our consolidated statements of comprehensive income (loss). Other real estate companies and REITs may calculate Consolidated Property NOI differently than we do.
|
|
(5)
|
We calculate FFO available for common shareholders and Normalized FFO available for common shareholders as shown above. FFO available for common shareholders is calculated on the basis defined by The National Association of Real Estate Investment Trusts, or Nareit, which is net income (loss) available for common shareholders calculated in accordance with GAAP, plus real estate depreciation and amortization of consolidated properties and our proportionate share of the real estate depreciation and amortization of unconsolidated joint venture properties and the difference between FFO attributable to an equity investment and equity in earnings of SIR included in discontinued operations but excluding impairment charges on and increases in the carrying value of real estate assets, any gain or loss on sale of real estate, as well as certain other adjustments currently not applicable to us. Our calculation of Normalized FFO available for common shareholders differs from Nareit's definition of FFO available for common shareholders because we include Normalized FFO attributable to our equity investment in SIR (net of FFO attributable to our equity investment in SIR) included in discontinued operations, we include business management incentive fees, if any, only in the fourth quarter versus the quarter when they are recognized as expense in accordance with GAAP due to their quarterly volatility not necessarily being indicative of our core operating performance and the uncertainty as to whether any such business management incentive fees will be payable when all contingencies for determining such fees are known at the end of the calendar year and we exclude acquisition and transaction related costs, loss on early extinguishment of debt, gains on issuance of shares by SIR included in discontinued operations, unrealized gains and losses on equity securities and loss on sale of SIR shares included in discontinued operations. We consider FFO available for common shareholders and Normalized FFO available for common shareholders to be appropriate supplemental measures of operating performance for a REIT, along with net income (loss) and net income (loss) available for our common shareholders. We believe that FFO available for common shareholders and Normalized FFO available for common shareholders provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense, FFO available for common shareholders and Normalized FFO available for common shareholders may facilitate a comparison of our operating performance between periods and with other REITs. FFO available for common shareholders and Normalized FFO available for common shareholders are among the factors considered by our Board of Trustees when determining the amount of distributions to our shareholders. Other factors include, but are not limited to, requirements to maintain our qualification for taxation as a REIT, limitations in our credit agreement and public debt covenants, the availability to us of debt and equity capital, our expectation of our future capital requirements and operating performance and our expected needs for and availability of cash to pay our obligations. FFO available for common shareholders and Normalized FFO available for common shareholders do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss) or net income (loss) available for common shareholders as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with net income (loss) and net income (loss) available for common shareholders as presented in our consolidated statements of comprehensive income (loss). Other real estate companies and REITs may calculate FFO available for common shareholders and Normalized FFO available for common shareholders differently than we do.
|
|
|
|
|
|
|
|
|
|
|
|
Acquired Properties Results
(2)
|
|
Disposed Properties Results
(3)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
|
|
Comparable Properties Results
(1)
|
|
Year Ended
|
|
Year Ended
|
|
Consolidated Results
|
||||||||||||||||||||||||||||||||||||||
|
|
|
Year Ended December 31,
|
|
December 31,
|
|
December 31,
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
%
|
||||||||||||||||||||||
|
|
|
2017
|
|
2016
|
|
Change
|
|
Change
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Change
|
|
Change
|
||||||||||||||||||||||
|
Rental income
|
|
$
|
253,197
|
|
|
$
|
249,429
|
|
|
$
|
3,768
|
|
|
1.5
|
%
|
|
$
|
63,335
|
|
|
$
|
8,751
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
316,532
|
|
|
$
|
258,180
|
|
|
$
|
58,352
|
|
|
22.6
|
%
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Real estate taxes
|
|
30,814
|
|
|
29,725
|
|
|
1,089
|
|
|
3.7
|
%
|
|
7,128
|
|
|
978
|
|
|
—
|
|
|
—
|
|
|
37,942
|
|
|
30,703
|
|
|
7,239
|
|
|
23.6
|
%
|
||||||||||
|
Utility expenses
|
|
16,535
|
|
|
16,652
|
|
|
(117
|
)
|
|
(0.7
|
%)
|
|
4,463
|
|
|
617
|
|
|
—
|
|
|
—
|
|
|
20,998
|
|
|
17,269
|
|
|
3,729
|
|
|
21.6
|
%
|
||||||||||
|
Other operating expenses
|
|
54,027
|
|
|
52,129
|
|
|
1,898
|
|
|
3.6
|
%
|
|
11,173
|
|
|
1,936
|
|
|
149
|
|
|
225
|
|
|
65,349
|
|
|
54,290
|
|
|
11,059
|
|
|
20.4
|
%
|
||||||||||
|
Total operating expenses
|
|
101,376
|
|
|
98,506
|
|
|
2,870
|
|
|
2.9
|
%
|
|
22,764
|
|
|
3,531
|
|
|
149
|
|
|
225
|
|
|
124,289
|
|
|
102,262
|
|
|
22,027
|
|
|
21.5
|
%
|
||||||||||
|
Net operating income (loss)
(4)
|
|
$
|
151,821
|
|
|
$
|
150,923
|
|
|
$
|
898
|
|
|
0.6
|
%
|
|
$
|
40,571
|
|
|
$
|
5,220
|
|
|
$
|
(149
|
)
|
|
$
|
(225
|
)
|
|
192,243
|
|
|
155,918
|
|
|
36,325
|
|
|
23.3
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Other expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Depreciation and amortization
|
|
|
|
|
|
109,588
|
|
|
73,153
|
|
|
36,435
|
|
|
49.8
|
%
|
||||||||||||||||||||||||||||||
|
Loss on impairment of real estate
|
|
|
|
|
|
9,490
|
|
|
—
|
|
|
9,490
|
|
|
nm
|
|
||||||||||||||||||||||||||||||
|
Acquisition and transaction related costs
|
|
|
|
|
|
—
|
|
|
1,191
|
|
|
(1,191
|
)
|
|
nm
|
|
||||||||||||||||||||||||||||||
|
General and administrative
|
|
|
|
|
|
18,847
|
|
|
14,897
|
|
|
3,950
|
|
|
26.5
|
%
|
||||||||||||||||||||||||||||||
|
Total other expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,925
|
|
|
89,241
|
|
|
48,684
|
|
|
54.6
|
%
|
||||||||||||||||||
|
Gain on sale of real estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
79
|
|
|
(79
|
)
|
|
nm
|
|
||||||||||||||||||
|
Dividend income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,216
|
|
|
971
|
|
|
245
|
|
|
25.2
|
%
|
||||||||||||||||||
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,962
|
|
|
158
|
|
|
1,804
|
|
|
nm
|
|
||||||||||||||||||
|
Interest expense
|
|
(65,406
|
)
|
|
(45,060
|
)
|
|
(20,346
|
)
|
|
45.2
|
%
|
||||||||||||||||||||||||||||||||||
|
Gain (loss) on early extinguishment of debt
|
|
|
|
|
|
(1,715
|
)
|
|
104
|
|
|
(1,819
|
)
|
|
nm
|
|
||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes and equity in net earnings (losses) of investees
|
|
(9,625
|
)
|
|
22,929
|
|
|
(32,554
|
)
|
|
(142.0
|
%)
|
||||||||||||||||||||||||||||||||||
|
Income tax expense
|
|
(101
|
)
|
|
(101
|
)
|
|
—
|
|
|
—
|
%
|
||||||||||||||||||||||||||||||||||
|
Equity in net earnings (losses) of investees
|
|
(13
|
)
|
|
137
|
|
|
(150
|
)
|
|
(109.5
|
%)
|
||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations
|
|
(9,739
|
)
|
|
22,965
|
|
|
(32,704
|
)
|
|
(142.4
|
%)
|
||||||||||||||||||||||||||||||||||
|
Income from discontinued operations
|
|
21,829
|
|
|
34,878
|
|
|
(13,049
|
)
|
|
(37.4
|
%)
|
||||||||||||||||||||||||||||||||||
|
Net income
|
|
12,090
|
|
|
57,843
|
|
|
(45,753
|
)
|
|
(79.1
|
%)
|
||||||||||||||||||||||||||||||||||
|
Preferred units of limited partnership distributions
|
|
(275
|
)
|
|
—
|
|
|
(275
|
)
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Net income available for common shareholders
|
|
$
|
11,815
|
|
|
$
|
57,843
|
|
|
$
|
(46,028
|
)
|
|
(79.6
|
%)
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Weighted average common shares outstanding (basic)
|
|
21,158
|
|
|
17,763
|
|
|
3,395
|
|
|
19.1
|
%
|
||||||||||||||||||||||||||||||||||
|
Weighted average common shares outstanding (diluted)
|
|
21,158
|
|
|
17,768
|
|
|
3,390
|
|
|
19.1
|
%
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Per common share amounts (basic and diluted):
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations
|
|
$
|
(0.47
|
)
|
|
$
|
1.29
|
|
|
$
|
(1.76
|
)
|
|
(136.4
|
%)
|
|||||||||||||||||||||||||||||||
|
Income from discontinued operations
|
|
$
|
1.03
|
|
|
$
|
1.96
|
|
|
$
|
(0.93
|
)
|
|
(47.4
|
%)
|
|||||||||||||||||||||||||||||||
|
Net income available for common shareholders
|
|
$
|
0.56
|
|
|
$
|
3.26
|
|
|
$
|
(2.70
|
)
|
|
(82.8
|
%)
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Reconciliation of Net Income Available for Common Shareholders to Consolidated Property NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Net income available for common shareholders
|
|
|
|
|
|
$
|
11,815
|
|
|
$
|
57,843
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Preferred units of limited partnership distributions
|
|
|
|
|
|
275
|
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Net income
|
|
|
|
|
|
12,090
|
|
|
57,843
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Income from discontinued operations
|
|
|
|
|
|
(21,829
|
)
|
|
(34,878
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations
|
|
|
|
|
|
(9,739
|
)
|
|
22,965
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Equity in net earnings (losses) of investees
|
|
|
|
|
|
13
|
|
|
(137
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Income tax expense
|
|
|
|
|
|
101
|
|
|
101
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes and equity in net earnings (losses) of investees
|
|
|
|
|
|
(9,625
|
)
|
|
22,929
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
(Gain) loss on early extinguishment of debt
|
|
|
|
|
|
1,715
|
|
|
(104
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Interest expense
|
|
|
|
|
|
65,406
|
|
|
45,060
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Interest income
|
|
|
|
|
|
(1,962
|
)
|
|
(158
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Dividend income
|
|
|
|
|
|
(1,216
|
)
|
|
(971
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Gain on sale of real estate
|
|
|
|
|
|
—
|
|
|
(79
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
General and administrative
|
|
|
|
|
|
18,847
|
|
|
14,897
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Acquisition and transaction related costs
|
|
|
|
|
|
—
|
|
|
1,191
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Loss on impairment of real estate
|
|
|
|
|
|
9,490
|
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Depreciation and amortization
|
|
|
|
|
|
109,588
|
|
|
73,153
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Consolidated Property NOI
|
|
|
|
|
|
$
|
192,243
|
|
|
$
|
155,918
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Calculation of Funds From Operations Available for Common Shareholders and Normalized Funds From Operations Available for Common Shareholders
(5)
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
||||
|
Net income available for common shareholders
|
|
|
|
|
|
$
|
11,815
|
|
|
$
|
57,843
|
|
|
|
|
|
||||||||||||
|
Add (less): Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Consolidated properties
|
|
|
|
|
|
109,588
|
|
|
73,153
|
|
|
|
|
|
||||||||||||||
|
Unconsolidated joint venture properties
|
|
|
|
|
|
2,185
|
|
|
—
|
|
|
|
|
|
||||||||||||||
|
FFO attributable to Select Income REIT
|
|
|
|
|
|
58,279
|
|
|
71,227
|
|
|
|
|
|
||||||||||||||
|
Loss on impairment of real estate
|
|
|
|
|
|
9,490
|
|
|
—
|
|
|
|
|
|
||||||||||||||
|
Equity in earnings from Select Income REIT included in discontinued operations
|
|
|
|
|
|
(21,584
|
)
|
|
(35,381
|
)
|
|
|
|
|
||||||||||||||
|
Increase in carrying value of property included in discontinued operations
|
|
|
|
|
|
(619
|
)
|
|
—
|
|
|
|
|
|
||||||||||||||
|
Gain on sale of real estate
|
|
|
|
|
|
—
|
|
|
(79
|
)
|
|
|
|
|
||||||||||||||
|
Funds from operations available for common shareholders
|
|
|
|
|
|
169,154
|
|
|
166,763
|
|
|
|
|
|
||||||||||||||
|
Add (less): Acquisition and transaction related costs
|
|
|
|
|
|
—
|
|
|
1,191
|
|
|
|
|
|
||||||||||||||
|
Normalized FFO attributable to Select Income REIT
|
|
|
|
|
|
58,580
|
|
|
71,313
|
|
|
|
|
|
||||||||||||||
|
FFO attributable to Select Income REIT
|
|
|
|
|
|
(58,279
|
)
|
|
(71,227
|
)
|
|
|
|
|
||||||||||||||
|
(Gain) loss on early extinguishment of debt
|
|
|
|
|
|
1,715
|
|
|
(104
|
)
|
|
|
|
|
||||||||||||||
|
Net gain on issuance of shares by Select Income REIT included in discontinued operations
|
|
|
|
|
|
(72
|
)
|
|
(86
|
)
|
|
|
|
|
||||||||||||||
|
Normalized funds from operations available for common shareholders
|
|
|
|
|
|
$
|
171,098
|
|
|
$
|
167,850
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Funds from operations available for common shareholders per common share (basic and diluted)
|
|
|
|
|
|
$
|
7.99
|
|
|
$
|
9.39
|
|
|
|
|
|
||||||||||||
|
Normalized funds from operations available for common shareholders per common share (basic and diluted)
|
|
|
|
|
|
$
|
8.09
|
|
|
$
|
9.45
|
|
|
|
|
|
||||||||||||
|
(1)
|
Comparable properties consist of 89 buildings we owned on December 31, 2017 and which we owned continuously since January 1, 2016.
|
|
(2)
|
Acquired properties consist of 78 buildings we acquired since January 1, 2016. In October 2017, we acquired 72 of these buildings in connection with the FPO Transaction. We acquired one of these buildings in a separate transaction during 2017. The remaining five buildings were acquired during 2016.
|
|
(3)
|
Disposed properties consist of one building we sold during 2016 and one building we sold during 2017. Excludes one building classified as discontinued operations which was sold in August 2017.
|
|
(4)
|
See footnote (4) on page 60 for the definition of NOI.
|
|
(5)
|
See footnote (5) on page 60 for the definitions of FFO and Normalized FFO.
|
|
•
|
our ability to maintain or increase the occupancy of, and the rental rates at, our properties;
|
|
•
|
our ability to control operating expenses and capital expenses at our properties;
|
|
•
|
our ability to successfully complete our pending property sales and to sell properties that we market for sale; and
|
|
•
|
our ability to purchase additional properties which produce cash flows from operations in excess of our cost of acquisition capital and property operating expenses and capital expenses.
|
|
•
|
Our term loan which matures on March 31, 2020 is prepayable without penalty at any time and has an outstanding principal balance of $300,000 as of December 31, 2018. We are required to pay interest at a rate of LIBOR plus a premium, which was 140 basis points per annum at
December 31, 2018
, on the amount outstanding under this term loan. The interest rate premium is subject to adjustment based upon changes to our credit ratings. As of
December 31, 2018
, the annual interest rate for the amount outstanding under this term loan was
3.9%
.
|
|
•
|
Our term loan that was scheduled to mature on March 31, 2022 was prepayable without penalty at any time and had an outstanding principal balance of $250,000 until December 18, 2018. We were required to pay interest at a rate of LIBOR plus a premium, which was 180 basis points per annum at
December 31, 2018
, on the amount outstanding under this term loan. The interest rate premium is subject to adjustment based upon changes to our credit ratings. As of
December 31, 2018
, the annual interest rate for the amount outstanding under this term loan was
4.3%
. On December 18, 2018, we partially repaid this term loan with a principal payment of $162,000 without penalty using proceeds from the sale of a property portfolio located in southern Virginia. On February 11, 2019, we repaid the remaining outstanding principal balance of $88,000 without penalty using proceeds from the sale of a property portfolio located in Northern Virginia and Maryland.
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Contractual Obligations
|
|
Total
|
|
Less than
1 Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More than
5 Years
|
||||||||||
|
Long term debt obligations
|
|
$
|
3,311,262
|
|
|
$
|
362,054
|
|
|
$
|
790,127
|
|
|
$
|
1,032,301
|
|
|
$
|
1,126,780
|
|
|
Tenant related obligations
(1)
|
|
58,380
|
|
|
31,821
|
|
|
11,836
|
|
|
4,002
|
|
|
10,721
|
|
|||||
|
Operating leases
(2)
|
|
3,350
|
|
|
1,584
|
|
|
1,766
|
|
|
—
|
|
|
—
|
|
|||||
|
Projected interest expense
(3)
|
|
895,303
|
|
|
133,796
|
|
|
197,250
|
|
|
131,454
|
|
|
432,803
|
|
|||||
|
Total
|
|
$
|
4,268,295
|
|
|
$
|
529,255
|
|
|
$
|
1,000,979
|
|
|
$
|
1,167,757
|
|
|
$
|
1,570,304
|
|
|
(1)
|
Committed tenant related obligations includes leasing commissions and tenant improvements and are based on leases in effect as of December 31, 2018.
|
|
(2)
|
Reflects the lease obligations we assumed related to FPO's former corporate headquarters, net of sublease income.
|
|
(3)
|
Projected interest expense is attributable to only our debt obligations at existing rates as of
December 31, 2018
and is not intended to project future interest costs which may result from debt prepayments, additional borrowings under our revolving credit facility, new debt issuances or changes in interest rates.
|
|
•
|
allocation of purchase prices between various asset categories, including allocations to above and below market leases and the related impact on the recognition of rental income and depreciation and amortization expenses; and
|
|
•
|
assessment of the carrying values and impairments of long lived assets.
|
|
Indebtedness
|
|
Principal Balance
(1)
|
|
Annual Interest Rate
(1)
|
|
Annual Interest Expense
(1)
|
|
Maturity
|
|
Interest Payments Due
|
||||
|
Senior unsecured notes
|
|
$
|
350,000
|
|
|
3.750%
|
|
$
|
13,125
|
|
|
2019
|
|
Semi-annually
|
|
Senior unsecured notes
|
|
400,000
|
|
|
3.600%
|
|
14,400
|
|
|
2020
|
|
Semi-annually
|
||
|
Senior unsecured notes
|
|
300,000
|
|
|
4.000%
|
|
12,000
|
|
|
2022
|
|
Semi-annually
|
||
|
Senior unsecured notes
|
|
300,000
|
|
|
4.150%
|
|
12,450
|
|
|
2022
|
|
Semi-annually
|
||
|
Senior unsecured notes
|
|
350,000
|
|
|
4.250%
|
|
14,875
|
|
|
2024
|
|
Semi-annually
|
||
|
Senior unsecured notes
|
|
400,000
|
|
|
4.500%
|
|
18,000
|
|
|
2025
|
|
Semi-annually
|
||
|
Senior unsecured notes
|
|
310,000
|
|
|
5.875%
|
|
18,213
|
|
|
2046
|
|
Quarterly
|
||
|
Mortgage note (one building in Tampa, FL)
|
|
7,939
|
|
|
7.000%
|
|
556
|
|
|
2019
|
|
Monthly
|
||
|
Mortgage note (one building in Washington, D.C.)
|
|
33,703
|
|
|
5.720%
|
|
1,928
|
|
|
2020
|
|
Monthly
|
||
|
Mortgage note (one building in Philadelphia, PA)
|
|
40,772
|
|
|
4.160%
|
|
1,696
|
|
|
2020
|
|
Monthly
|
||
|
Mortgage note (one building in Lakewood, CO)
|
|
2,912
|
|
|
8.150%
|
|
237
|
|
|
2021
|
|
Monthly
|
||
|
Mortgage note (one building in Fairfax, VA)
|
|
13,437
|
|
|
5.877%
|
|
790
|
|
|
2021
|
|
Monthly
|
||
|
Mortgage note (one building in Washington, D.C.)
|
|
27,210
|
|
|
4.220%
|
|
1,148
|
|
|
2022
|
|
Monthly
|
||
|
Mortgage note (three buildings in Seattle, WA)
|
|
71,000
|
|
|
3.550%
|
|
2,521
|
|
|
2023
|
|
Monthly
|
||
|
Mortgage note (one building in Chicago, IL)
|
|
50,000
|
|
|
3.700%
|
|
1,850
|
|
|
2023
|
|
Monthly
|
||
|
Mortgage note (one building in Washington, D.C.)
|
|
24,509
|
|
|
4.800%
|
|
1,176
|
|
|
2023
|
|
Monthly
|
||
|
Mortgage note (one building in Washington, D.C.)
|
|
66,780
|
|
|
4.050%
|
|
2,705
|
|
|
2030
|
|
Monthly
|
||
|
|
|
$
|
2,748,262
|
|
|
|
|
$
|
117,670
|
|
|
|
|
|
|
(1)
|
The principal balances and interest rates are the amounts stated in the contracts. In accordance with GAAP, our carrying values and recorded interest expense may differ from these amounts because of market conditions at the time we issued or assumed these debts. For more information, see Notes 9 and 10 to the Notes to Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
|
|
Debt
|
|
Our JV Ownership Interest
|
|
Principal Balance
(1)(2)
|
|
Annual Interest Rate
(1)
|
|
Annual Interest Expense
(1)
|
|
Maturity
|
|
Interest Payments Due
|
|||||
|
Mortgage note (one building in Washington, D.C.)
|
|
50%
|
|
$
|
32,000
|
|
|
3.920
|
%
|
|
$
|
1,254
|
|
|
2024
|
|
Monthly
|
|
Mortgage note (two buildings in Fairfax, VA)
|
|
51%
|
|
50,000
|
|
|
3.910
|
%
|
|
1,955
|
|
|
2029
|
|
Monthly
|
||
|
|
|
|
|
$
|
82,000
|
|
|
|
|
$
|
3,209
|
|
|
|
|
|
|
|
(1)
|
The principal balance, annual interest rate and annual interest expense are the amounts stated in the applicable contract. In accordance with GAAP, recorded interest expense may differ from these amounts because of market conditions at the time they incurred the debt.
|
|
(2)
|
Reflects the entire balance of the debt secured by the properties and is not adjusted to reflect the part of the joint venture arrangement interests we do not own.
|
|
|
|
Impact of Changes in Interest Rates
|
||||||||||||
|
|
|
Annual
|
|
Outstanding
|
|
Total Interest
|
|
Annual Earnings
|
||||||
|
|
|
Interest Rate
(1)
|
|
Debt
|
|
Expense Per Year
|
|
Per Share Impact
(2)
|
||||||
|
At December 31, 2018
|
|
3.9 %
|
|
$
|
563,000
|
|
|
$
|
21,957
|
|
|
$
|
0.88
|
|
|
One percentage point increase
|
|
4.9 %
|
|
$
|
563,000
|
|
|
$
|
27,587
|
|
|
$
|
1.11
|
|
|
(1)
|
Weighted based on the respective interest rates and outstanding borrowings under our revolving credit facility and our term loans as of
December 31, 2018
.
|
|
(2)
|
Based on the weighted average shares outstanding (diluted) for the
year ended
December 31, 2018
.
|
|
|
|
Impact of an Increase in Interest Rates
|
||||||||||||
|
|
|
Annual
|
|
Outstanding
|
|
Total Interest
|
|
Annual Earnings
|
||||||
|
|
|
Interest Rate
(1)
|
|
Debt
|
|
Expense Per Year
|
|
Per Share Impact
(2)
|
||||||
|
At December 31, 2018
|
|
3.7 %
|
|
$
|
1,138,000
|
|
|
$
|
42,106
|
|
|
$
|
1.70
|
|
|
One percentage point increase
|
|
4.7 %
|
|
$
|
1,138,000
|
|
|
$
|
53,486
|
|
|
$
|
2.15
|
|
|
(1)
|
Weighted based on the respective interest rates and outstanding borrowings under our revolving credit facility (assuming fully drawn) and our term loans as of
December 31, 2018
.
|
|
(2)
|
Based on the weighted average shares outstanding (diluted) for the
year ended
December 31, 2018
.
|
|
Plan Category
|
|
Number of securities to be
issued upon exercise of outstanding
options,
warrants and rights
|
|
Weighted-average
exercise price of
outstanding options, warrants and rights
|
|
Number of securities remaining
available
for
future issuance under equity compensation plans
(excluding securities
reflected in column (a))
|
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
Equity compensation plans approved by securityholders—
2009 Plan
|
|
None.
|
|
None.
|
|
330,372
(1)
|
|
Equity compensation plans not approved by securityholders
|
|
None.
|
|
None.
|
|
None.
|
|
Total
|
|
None.
|
|
None.
|
|
330,372
(1)
|
|
(1)
|
Consists of common shares available for issuance pursuant to the terms of the 2009 Plan. Share awards that are repurchased or forfeited
will be added to the common shares available for issuance under the 2009 Plan.
|
|
(a)
|
Index to Financial Statements and Financial Statement Schedules
|
|
Exhibit
Number
|
|
Description
|
|
2.1
|
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
4.3
|
|
|
|
4.4
|
|
|
|
4.5
|
|
|
|
4.6
|
|
|
|
4.7
|
|
|
|
4.8
|
|
|
|
4.9
|
|
|
|
4.10
|
|
|
|
4.11
|
|
|
|
4.12
|
|
|
|
8.1
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10.4
|
|
|
|
10.5
|
|
|
|
10.6
|
|
|
|
10.7
|
|
|
|
10.8
|
|
|
|
10.9
|
|
|
|
10.10
|
|
|
|
10.11
|
|
|
|
21.1
|
|
|
|
23.1
|
|
|
|
23.2
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
99.1
|
|
|
|
99.2
|
|
|
|
99.3
|
|
|
|
99.4
|
|
|
|
99.5
|
|
|
|
101.1
|
|
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Comprehensive Income (Loss), (iii) the Consolidated Statements of Shareholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) related notes to these financial statements, tagged as blocks of text and in detail. (Filed herewith.)
|
|
/s/ Ernst & Young LLP
|
|
|
|
|
|
We have served as the Company's auditor since 2008.
|
|
|
|
|
|
Boston, Massachusetts
February 28, 2019
|
|
|
/s/ Ernst & Young LLP
|
|
|
|
|
|
Boston, Massachusetts
February 28, 2019
|
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
ASSETS
|
|
|
|
||||
|
Real estate properties:
|
|
|
|
||||
|
Land
|
$
|
924,164
|
|
|
$
|
627,108
|
|
|
Buildings and improvements
|
3,020,472
|
|
|
2,348,613
|
|
||
|
Total real estate properties, gross
|
3,944,636
|
|
|
2,975,721
|
|
||
|
Accumulated depreciation
|
(375,147
|
)
|
|
(341,848
|
)
|
||
|
Total real estate properties, net
|
3,569,489
|
|
|
2,633,873
|
|
||
|
Assets of discontinued operations - Equity investment in Select Income REIT
|
—
|
|
|
467,499
|
|
||
|
Assets of properties held for sale
|
253,501
|
|
|
—
|
|
||
|
Investment in unconsolidated joint ventures
|
43,665
|
|
|
50,202
|
|
||
|
Acquired real estate leases, net
|
1,056,558
|
|
|
351,872
|
|
||
|
Cash and cash equivalents
|
35,349
|
|
|
16,569
|
|
||
|
Restricted cash
|
3,594
|
|
|
3,111
|
|
||
|
Rents receivable, net
|
72,051
|
|
|
61,429
|
|
||
|
Deferred leasing costs, net
|
25,672
|
|
|
22,977
|
|
||
|
Other assets, net
|
178,704
|
|
|
96,033
|
|
||
|
Total assets
|
$
|
5,238,583
|
|
|
$
|
3,703,565
|
|
|
|
|
|
|
||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
|
Unsecured revolving credit facility
|
$
|
175,000
|
|
|
$
|
570,000
|
|
|
Unsecured term loans, net
|
387,152
|
|
|
547,852
|
|
||
|
Senior unsecured notes, net
|
2,357,497
|
|
|
944,140
|
|
||
|
Mortgage notes payable, net
|
335,241
|
|
|
183,100
|
|
||
|
Liabilities of properties held for sale
|
4,271
|
|
|
—
|
|
||
|
Accounts payable and other liabilities
|
145,536
|
|
|
89,440
|
|
||
|
Due to related persons
|
34,887
|
|
|
4,859
|
|
||
|
Assumed real estate lease obligations, net
|
20,031
|
|
|
13,635
|
|
||
|
Total liabilities
|
3,459,615
|
|
|
2,353,026
|
|
||
|
|
|
|
|
||||
|
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
|
||||
|
Preferred units of limited partnership
|
—
|
|
|
20,496
|
|
||
|
|
|
|
|
||||
|
Shareholders’ equity:
|
|
|
|
||||
|
Common shares of beneficial interest, $.01 par value: 200,000,000 shares authorized,
|
|
|
|
||||
|
48,082,903 and 24,786,479 shares issued and outstanding, respectively
|
481
|
|
|
248
|
|
||
|
Additional paid in capital
|
2,609,801
|
|
|
1,968,960
|
|
||
|
Cumulative net income
|
146,882
|
|
|
108,144
|
|
||
|
Cumulative other comprehensive income
|
106
|
|
|
60,427
|
|
||
|
Cumulative common distributions
|
(978,302
|
)
|
|
(807,736
|
)
|
||
|
Total shareholders’ equity
|
1,778,968
|
|
|
1,330,043
|
|
||
|
Total liabilities and shareholders’ equity
|
$
|
5,238,583
|
|
|
$
|
3,703,565
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|
||||||
|
Rental income
|
$
|
426,560
|
|
|
$
|
316,532
|
|
|
$
|
258,180
|
|
|
|
|
|
|
|
|
||||||
|
EXPENSES:
|
|
|
|
|
|
||||||
|
Real estate taxes
|
49,708
|
|
|
37,942
|
|
|
30,703
|
|
|||
|
Utility expenses
|
26,425
|
|
|
20,998
|
|
|
17,269
|
|
|||
|
Other operating expenses
|
89,610
|
|
|
65,349
|
|
|
54,290
|
|
|||
|
Depreciation and amortization
|
162,488
|
|
|
109,588
|
|
|
73,153
|
|
|||
|
Loss on impairment of real estate
|
8,630
|
|
|
9,490
|
|
|
—
|
|
|||
|
Acquisition and transaction related costs
|
14,508
|
|
|
—
|
|
|
1,191
|
|
|||
|
General and administrative
|
24,922
|
|
|
18,847
|
|
|
14,897
|
|
|||
|
Total expenses
|
376,291
|
|
|
262,214
|
|
|
191,503
|
|
|||
|
|
|
|
|
|
|
||||||
|
Gain on sale of real estate
|
20,661
|
|
|
—
|
|
|
79
|
|
|||
|
Dividend income
|
1,337
|
|
|
1,216
|
|
|
971
|
|
|||
|
Unrealized loss on equity securities
|
(7,552
|
)
|
|
—
|
|
|
—
|
|
|||
|
Interest income
|
639
|
|
|
1,962
|
|
|
158
|
|
|||
|
Interest expense (including net amortization of debt premiums, discounts
|
|
|
|
|
|
||||||
|
and issuance costs of $3,626, $3,420 and $2,832, respectively)
|
(89,865
|
)
|
|
(65,406
|
)
|
|
(45,060
|
)
|
|||
|
Gain (loss) on early extinguishment of debt
|
(709
|
)
|
|
(1,715
|
)
|
|
104
|
|
|||
|
Income (loss) from continuing operations before income taxes and
|
|
|
|
|
|
||||||
|
equity in net earnings (losses) of investees
|
(25,220
|
)
|
|
(9,625
|
)
|
|
22,929
|
|
|||
|
Income tax expense
|
(117
|
)
|
|
(101
|
)
|
|
(101
|
)
|
|||
|
Equity in net earnings (losses) of investees
|
(2,269
|
)
|
|
(13
|
)
|
|
137
|
|
|||
|
Income (loss) from continuing operations
|
(27,606
|
)
|
|
(9,739
|
)
|
|
22,965
|
|
|||
|
Income from discontinued operations
|
5,722
|
|
|
21,829
|
|
|
34,878
|
|
|||
|
Net income (loss)
|
(21,884
|
)
|
|
12,090
|
|
|
57,843
|
|
|||
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||
|
Unrealized gain on equity securities
|
—
|
|
|
24,042
|
|
|
30,465
|
|
|||
|
Equity in unrealized gain (loss) of investees
|
(40
|
)
|
|
9,428
|
|
|
11,359
|
|
|||
|
Other comprehensive income (loss)
|
(40
|
)
|
|
33,470
|
|
|
41,824
|
|
|||
|
Comprehensive income (loss)
|
$
|
(21,924
|
)
|
|
$
|
45,560
|
|
|
$
|
99,667
|
|
|
|
|
|
|
|
|
||||||
|
Net income (loss)
|
$
|
(21,884
|
)
|
|
$
|
12,090
|
|
|
$
|
57,843
|
|
|
Preferred units of limited partnership distributions
|
(371
|
)
|
|
(275
|
)
|
|
—
|
|
|||
|
Net income (loss) available for common shareholders
|
$
|
(22,255
|
)
|
|
$
|
11,815
|
|
|
$
|
57,843
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average common shares outstanding (basic)
|
24,830
|
|
|
21,158
|
|
|
17,763
|
|
|||
|
Weighted average common shares outstanding (diluted)
|
24,830
|
|
|
21,158
|
|
|
17,768
|
|
|||
|
|
|
|
|
|
|
||||||
|
Per common share amounts (basic and diluted):
|
|
|
|
|
|
||||||
|
Income (loss) from continuing operations
|
$
|
(1.13
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
1.29
|
|
|
Income from discontinued operations
|
$
|
0.23
|
|
|
$
|
1.03
|
|
|
$
|
1.96
|
|
|
Net income (loss) available for common shareholders
|
$
|
(0.90
|
)
|
|
$
|
0.56
|
|
|
$
|
3.26
|
|
|
|
Number of Shares
|
|
Common Shares
|
|
Additional Paid In Capital
|
|
Cumulative
Net
Income
|
|
Cumulative
Other
Comprehensive
Income (Loss)
|
|
Cumulative
Common
Distributions
|
|
Total
|
|||||||||||||
|
Balance at December 31, 2015
|
17,781,577
|
|
|
$
|
178
|
|
|
$
|
1,473,015
|
|
|
$
|
38,486
|
|
|
$
|
(14,867
|
)
|
|
$
|
(540,161
|
)
|
|
$
|
956,651
|
|
|
Share grants
|
16,475
|
|
|
—
|
|
|
1,389
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,389
|
|
||||||
|
Share repurchases
|
(3,575
|
)
|
|
—
|
|
|
(337
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(337
|
)
|
||||||
|
Equity in unrealized gain of investees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,359
|
|
|
—
|
|
|
11,359
|
|
||||||
|
Unrealized gain on equity securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,465
|
|
|
—
|
|
|
30,465
|
|
||||||
|
Net income available for common shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
57,843
|
|
|
—
|
|
|
—
|
|
|
57,843
|
|
||||||
|
Distributions to common shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(122,366
|
)
|
|
(122,366
|
)
|
||||||
|
Balance at December 31, 2016
|
17,794,477
|
|
|
178
|
|
|
1,474,067
|
|
|
96,329
|
|
|
26,957
|
|
|
(662,527
|
)
|
|
935,004
|
|
||||||
|
Issuance of shares, net
|
6,976,757
|
|
|
70
|
|
|
493,796
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
493,866
|
|
||||||
|
Share grants
|
18,836
|
|
|
—
|
|
|
1,361
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,361
|
|
||||||
|
Share repurchases
|
(3,591
|
)
|
|
—
|
|
|
(264
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(264
|
)
|
||||||
|
Equity in unrealized gain of investees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,428
|
|
|
—
|
|
|
9,428
|
|
||||||
|
Unrealized gain on equity securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,042
|
|
|
—
|
|
|
24,042
|
|
||||||
|
Net income available for common shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
11,815
|
|
|
—
|
|
|
—
|
|
|
11,815
|
|
||||||
|
Distributions to common shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(145,209
|
)
|
|
(145,209
|
)
|
||||||
|
Balance at December 31, 2017
|
24,786,479
|
|
|
248
|
|
|
1,968,960
|
|
|
108,144
|
|
|
60,427
|
|
|
(807,736
|
)
|
|
1,330,043
|
|
||||||
|
Cumulative adjustment upon adoption of ASU No. 2016-01
|
—
|
|
|
—
|
|
|
—
|
|
|
60,281
|
|
|
(60,281
|
)
|
|
—
|
|
|
—
|
|
||||||
|
Adjustment upon adoption of ASU No. 2014-09
|
—
|
|
|
—
|
|
|
—
|
|
|
712
|
|
|
—
|
|
|
—
|
|
|
712
|
|
||||||
|
Balance at January 1, 2018
|
24,786,479
|
|
|
248
|
|
|
1,968,960
|
|
|
169,137
|
|
|
146
|
|
|
(807,736
|
)
|
|
1,330,755
|
|
||||||
|
Issuance of shares, net
|
23,281,738
|
|
|
233
|
|
|
639,550
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
639,783
|
|
||||||
|
Share grants
|
19,925
|
|
|
—
|
|
|
1,523
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,523
|
|
||||||
|
Shares forfeitures or repurchases
|
(5,239
|
)
|
|
—
|
|
|
(232
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(232
|
)
|
||||||
|
Equity in unrealized gain of investees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
||||||
|
Net loss available for common shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,255
|
)
|
|
—
|
|
|
—
|
|
|
(22,255
|
)
|
||||||
|
Distributions to common shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(170,566
|
)
|
|
(170,566
|
)
|
||||||
|
Balance at December 31, 2018
|
48,082,903
|
|
|
$
|
481
|
|
|
$
|
2,609,801
|
|
|
$
|
146,882
|
|
|
$
|
106
|
|
|
$
|
(978,302
|
)
|
|
$
|
1,778,968
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
|
Net income (loss)
|
$
|
(21,884
|
)
|
|
$
|
12,090
|
|
|
$
|
57,843
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
|
Depreciation
|
66,685
|
|
|
52,427
|
|
|
42,489
|
|
|||
|
Net amortization of debt premiums, discounts and issuance costs
|
3,626
|
|
|
3,420
|
|
|
2,832
|
|
|||
|
Gain on sale of real estate
|
(20,661
|
)
|
|
—
|
|
|
(79
|
)
|
|||
|
(Gain) loss on early extinguishment of debt
|
709
|
|
|
1,715
|
|
|
(104
|
)
|
|||
|
Straight line rental income
|
(10,164
|
)
|
|
(5,582
|
)
|
|
(2,691
|
)
|
|||
|
Amortization of acquired real estate leases
|
94,375
|
|
|
56,174
|
|
|
29,003
|
|
|||
|
Amortization of deferred leasing costs
|
4,833
|
|
|
3,802
|
|
|
3,265
|
|
|||
|
Other non-cash expenses, net
|
250
|
|
|
300
|
|
|
284
|
|
|||
|
Loss on impairment of real estate
|
8,630
|
|
|
9,490
|
|
|
—
|
|
|||
|
Unrealized loss on equity securities
|
7,552
|
|
|
—
|
|
|
—
|
|
|||
|
Increase in carrying value of property included in discontinued operations
|
—
|
|
|
(619
|
)
|
|
—
|
|
|||
|
Equity in net (earnings) losses of investees
|
2,269
|
|
|
13
|
|
|
(137
|
)
|
|||
|
Equity in earnings of Select Income REIT included in discontinued operations
|
(20,873
|
)
|
|
(21,584
|
)
|
|
(35,381
|
)
|
|||
|
Net gain on issuance of shares by Select Income REIT included in discontinued operations
|
(29
|
)
|
|
(72
|
)
|
|
(86
|
)
|
|||
|
Loss on sale of Select Income REIT shares included in discontinued operations
|
15,180
|
|
|
—
|
|
|
—
|
|
|||
|
Distributions of earnings from Select Income REIT
|
20,873
|
|
|
21,584
|
|
|
35,381
|
|
|||
|
Change in assets and liabilities:
|
|
|
|
|
|
||||||
|
Deferred leasing costs
|
(9,203
|
)
|
|
(5,017
|
)
|
|
(10,196
|
)
|
|||
|
Rents receivable
|
5,021
|
|
|
(4,990
|
)
|
|
1,670
|
|
|||
|
Other assets
|
1,127
|
|
|
1,368
|
|
|
25
|
|
|||
|
Accounts payable and other liabilities
|
(3,303
|
)
|
|
11,696
|
|
|
1,970
|
|
|||
|
Due to related persons
|
(97
|
)
|
|
1,339
|
|
|
634
|
|
|||
|
Net cash provided by operating activities
|
144,916
|
|
|
137,554
|
|
|
126,722
|
|
|||
|
|
|
|
|
|
|
||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
|
Real estate acquisitions and deposits
|
25,221
|
|
|
(1,187,012
|
)
|
|
(200,331
|
)
|
|||
|
Real estate improvements
|
(47,500
|
)
|
|
(45,940
|
)
|
|
(32,999
|
)
|
|||
|
Distributions in excess of earnings from Select Income REIT
|
17,251
|
|
|
29,248
|
|
|
14,954
|
|
|||
|
Distributions in excess of earnings from unconsolidated joint ventures
|
3,751
|
|
|
482
|
|
|
—
|
|
|||
|
Proceeds from sale of properties, net
|
304,808
|
|
|
15,083
|
|
|
263
|
|
|||
|
Proceeds from sale of Select Income REIT shares
|
435,125
|
|
|
—
|
|
|
—
|
|
|||
|
Net cash provided by (used in) investing activities
|
738,656
|
|
|
(1,188,139
|
)
|
|
(218,113
|
)
|
|||
|
|
|
|
|
|
|
||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|||
|
Repayment of mortgage notes payable
|
(3,708
|
)
|
|
(11,909
|
)
|
|
(107,933
|
)
|
|||
|
Repayment of unsecured term loan
|
(162,000
|
)
|
|
—
|
|
|
—
|
|
|||
|
Proceeds from issuance of senior notes, after discounts
|
—
|
|
|
297,954
|
|
|
300,235
|
|
|||
|
Proceeds from issuance of common shares, net
|
—
|
|
|
493,866
|
|
|
—
|
|
|||
|
Borrowings on unsecured revolving credit facility
|
238,000
|
|
|
645,000
|
|
|
399,000
|
|
|||
|
Repayments on unsecured revolving credit facility
|
(741,000
|
)
|
|
(235,000
|
)
|
|
(356,000
|
)
|
|||
|
Payment of debt issuance costs
|
(3,936
|
)
|
|
(4,644
|
)
|
|
(544
|
)
|
|||
|
Repurchase of common shares
|
(232
|
)
|
|
(264
|
)
|
|
(337
|
)
|
|||
|
Redemption of preferred units of limited partnership
|
(20,221
|
)
|
|
—
|
|
|
—
|
|
|||
|
Preferred units of limited partnership distributions
|
(646
|
)
|
|
—
|
|
|
—
|
|
|||
|
Distributions to common shareholders
|
(170,566
|
)
|
|
(145,209
|
)
|
|
(122,366
|
)
|
|||
|
Net cash (used in) provided by financing activities
|
(864,309
|
)
|
|
1,039,794
|
|
|
112,055
|
|
|||
|
|
|
|
|
|
|
||||||
|
Increase (decrease) in cash, cash equivalents and restricted cash
|
19,263
|
|
|
(10,791
|
)
|
|
20,664
|
|
|||
|
Cash, cash equivalents and restricted cash at beginning of period
|
19,680
|
|
|
30,471
|
|
|
9,807
|
|
|||
|
Cash, cash equivalents and restricted cash at end of period
|
$
|
38,943
|
|
|
$
|
19,680
|
|
|
$
|
30,471
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
|
Interest paid
|
$
|
65,188
|
|
|
$
|
55,048
|
|
|
$
|
41,139
|
|
|
Income taxes paid
|
$
|
68
|
|
|
$
|
117
|
|
|
$
|
111
|
|
|
|
|
|
|
|
|
||||||
|
NON-CASH INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
|
Sale of real estate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,600
|
|
|
Mortgage note receivable related to sale of real estate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3,600
|
)
|
|
Working capital assumed
|
$
|
30,483
|
|
|
$
|
(1,596
|
)
|
|
$
|
—
|
|
|
Real estate and investment acquired by issuance of common shares
|
$
|
(639,809
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Real estate and investment acquired by assumption of debt
|
$
|
(1,719,772
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||||
|
NON-CASH FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
|
SIR unsecured revolving credit facility
|
$
|
108,000
|
|
|
$
|
—
|
|
|
|
||
|
Assumption of mortgage notes payable
|
$
|
161,772
|
|
|
$
|
167,548
|
|
|
$
|
—
|
|
|
Assumption of senior unsecured notes
|
$
|
1,450,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Preferred units of limited partnership issued
|
$
|
—
|
|
|
$
|
20,221
|
|
|
$
|
—
|
|
|
Issuance of common shares
|
$
|
639,809
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
As of December 31,
|
||||||||||
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Cash and cash equivalents
|
|
$
|
35,349
|
|
|
$
|
16,569
|
|
|
$
|
29,941
|
|
|
Restricted cash
|
|
3,594
|
|
|
3,111
|
|
|
530
|
|
|||
|
Total cash, cash equivalents and restricted cash shown in the statements of cash flows
|
|
$
|
38,943
|
|
|
$
|
19,680
|
|
|
$
|
30,471
|
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
Acquired real estate leases:
|
|
|
|
||||
|
Capitalized above market lease values
|
$
|
62,260
|
|
|
$
|
46,096
|
|
|
Less: accumulated amortization
|
(20,956
|
)
|
|
(27,259
|
)
|
||
|
Capitalized above market lease values, net
|
41,304
|
|
|
18,837
|
|
||
|
|
|
|
|
||||
|
Lease origination value
|
1,168,979
|
|
|
472,928
|
|
||
|
Less: accumulated amortization
|
(153,725
|
)
|
|
(139,893
|
)
|
||
|
Lease origination value, net
|
1,015,254
|
|
|
333,035
|
|
||
|
Acquired real estate leases, net
|
$
|
1,056,558
|
|
|
$
|
351,872
|
|
|
|
|
|
|
||||
|
Assumed real estate lease obligations:
|
|
|
|
||||
|
Capitalized below market lease values
|
$
|
31,091
|
|
|
$
|
25,973
|
|
|
Less: accumulated amortization
|
(11,060
|
)
|
|
(12,338
|
)
|
||
|
Assumed real estate lease obligations, net
|
$
|
20,031
|
|
|
$
|
13,635
|
|
|
|
For the Year Ended December 31,
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
|
Weighted average common shares for basic earnings per share
|
24,830
|
|
|
21,158
|
|
|
17,763
|
|
|
Effect of dilutive securities: unvested share awards
|
—
|
|
|
—
|
|
|
5
|
|
|
Weighted average common shares for diluted earnings per share
(1)
|
24,830
|
|
|
21,158
|
|
|
17,768
|
|
|
(1)
|
For the years ended
December 31, 2018
and 2017,
four
and
five
unvested common shares, respectively, were not included in the calculation of diluted earnings per share because to do so would have been antidilutive.
|
|
Total Purchase Price (excluding acquisition costs):
|
|
|||
|
|
OPI common shares issued
|
23,282,704
|
|
|
|
|
Closing price of OPI common shares on December 31, 2018
|
$
|
27.48
|
|
|
|
Value of consideration transferred
|
$
|
639,809
|
|
|
|
Cash consideration for fractional shares
|
8
|
|
|
|
|
Equity issuance costs
|
(239
|
)
|
|
|
|
Value of consideration transferred
|
$
|
639,578
|
|
|
|
|
|
||
|
|
Assumed working capital
|
55,703
|
|
|
|
|
Assumed senior unsecured notes, principal balance
|
1,450,000
|
|
|
|
|
Assumed mortgage notes payable, principal balance
|
161,772
|
|
|
|
|
SIR unsecured revolving credit facility repaid at closing
|
108,000
|
|
|
|
|
Non-cash portion of purchase price
|
1,775,475
|
|
|
|
|
Total consideration transferred and liabilities assumed
|
$
|
2,415,053
|
|
|
Preliminary Purchase Price Allocation:
|
|
|||
|
|
Land
|
$
|
475,893
|
|
|
|
Buildings and improvements
|
960,286
|
|
|
|
|
Assets of properties held for sale
|
7,022
|
|
|
|
|
Acquired real estate leases
|
858,121
|
|
|
|
|
Cash
|
24,744
|
|
|
|
|
Restricted cash
|
476
|
|
|
|
|
Rents receivable, net
|
11,389
|
|
|
|
|
Other assets
(1)
|
89,188
|
|
|
|
|
Total assets
|
2,427,119
|
|
|
|
|
Unsecured revolving credit facility
(2)
|
(108,000
|
)
|
|
|
|
Senior unsecured notes
(3)
|
(1,410,947
|
)
|
|
|
|
Mortgage notes payable
(4)
|
(159,490
|
)
|
|
|
|
Accounts payable and other liabilities
|
(67,151
|
)
|
|
|
|
Assumed real estate lease obligations
|
(11,833
|
)
|
|
|
|
Due to related persons
|
(30,120
|
)
|
|
|
|
Net assets acquired
|
639,578
|
|
|
|
|
Assumed working capital
|
55,703
|
|
|
|
|
SIR unsecured revolving credit facility repaid at closing
(2)
|
108,000
|
|
|
|
|
Assumed senior unsecured notes, principal balance
|
1,450,000
|
|
|
|
|
Assumed mortgage notes payable, principal balance
|
161,772
|
|
|
|
|
Consideration transferred and liabilities assumed
(5)
|
$
|
2,415,053
|
|
|
(1)
|
Other assets includes
$84,229
for SIR's investment in shares of class A common stock of RMR Inc. which was recorded at fair value as of
December 31, 2018
.
|
|
(2)
|
We repaid the outstanding balance under SIR's revolving credit facility at the closing of the SIR Merger with borrowings under our revolving credit facility.
|
|
(3)
|
The aggregate principal balance of the senior unsecured notes was
$1,450,000
as of
December 31, 2018
.
|
|
(4)
|
The aggregate principal balance of the mortgage notes payable was
$161,772
as of
December 31, 2018
.
|
|
(5)
|
The allocation of purchase price is based on preliminary estimates and may change significantly following the completion of (i) third party appraisals and (ii) our analysis of intangibles and building valuations. Purchase price excludes acquisition related costs.
|
|
Total Purchase Price:
|
|
|
|||
|
|
Cash consideration
|
|
$
|
1,175,140
|
|
|
|
Acquisition related costs
|
|
9,575
|
|
|
|
|
Total cash consideration
|
|
1,184,715
|
|
|
|
|
Preferred units of limited partnership issued
(1)
|
|
20,221
|
|
|
|
|
Acquired net working capital
|
|
(1,596
|
)
|
|
|
|
Assumed mortgage notes
|
|
167,548
|
|
|
|
|
Non-cash portion of purchase price
|
|
186,173
|
|
|
|
|
Gross purchase price
|
|
$
|
1,370,888
|
|
|
|
|
|
|
||
|
Purchase Price Allocation:
|
|
|
|||
|
|
Land
|
|
$
|
360,909
|
|
|
|
Buildings and improvements
|
|
681,340
|
|
|
|
|
Acquired real estate leases
(2)
|
|
283,498
|
|
|
|
|
Investment in unconsolidated joint ventures
|
|
51,305
|
|
|
|
|
Cash
|
|
11,191
|
|
|
|
|
Restricted cash
|
|
1,018
|
|
|
|
|
Rents receivable
|
|
2,672
|
|
|
|
|
Other assets
|
|
3,640
|
|
|
|
|
Total assets
|
|
1,395,573
|
|
|
|
|
|
|
|
||
|
|
Mortgage notes payable
(3)
|
|
(167,936
|
)
|
|
|
|
Assumed real estate lease obligations
(2)
|
|
(5,776
|
)
|
|
|
|
Accounts payable and accrued expenses
|
|
(10,640
|
)
|
|
|
|
Rents collected in advance
|
|
(1,436
|
)
|
|
|
|
Security deposits
|
|
(4,849
|
)
|
|
|
|
Net assets acquired
|
|
1,204,936
|
|
|
|
|
|
|
|
||
|
|
Assumed working capital
|
|
(1,596
|
)
|
|
|
|
Assumed principal balance of debt
|
|
167,548
|
|
|
|
|
Gross purchase price
|
|
$
|
1,370,888
|
|
|
|
|
|
|
||
|
(1)
|
Pursuant to the terms of the FPO Transaction, each unit of limited partnership interest in FPO's operating partnership that was not liquidated on the closing date was exchanged on a one-for-one basis for
5.5%
Series A Cumulative Preferred Units of the surviving subsidiary. As of December 31, 2017, the carrying value of these Series A Cumulative Preferred Units was
$20,496
and was recorded as temporary equity on our consolidated balance sheet. On May 1, 2018, we redeemed all
1,813,504
of the outstanding
5.5%
Series A Cumulative Preferred Units for
$11.15
per unit (plus accrued and unpaid distributions) for an aggregate of
$20,310
.
|
|
(2)
|
As of the date acquired, the weighted average amortization periods for capitalized above market lease values, lease origination value and capitalized below market lease values were
3.2 years
,
3.1 years
and
3.8 years
, respectively.
|
|
(3)
|
Includes fair value adjustments totaling
$388
on
$167,936
principal amount of mortgage notes we assumed in connection with the FPO Transaction.
|
|
|
Year Ended December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
Rental income
|
$
|
758,596
|
|
|
$
|
746,801
|
|
|
Net loss
|
$
|
(87,240
|
)
|
|
$
|
(74,556
|
)
|
|
Net loss per common share
|
$
|
(1.82
|
)
|
|
$
|
(1.55
|
)
|
|
|
|
OPI Ownership
|
|
OPI Carrying Value of Investment at December 31,
|
|
Number of Office Buildings
|
|
Location
|
|
Square Feet
|
||||||
|
Joint Venture
|
|
|
2018
|
|
2017
|
|
|
|
||||||||
|
Prosperity Metro Plaza
|
|
51%
|
|
$
|
23,969
|
|
|
$
|
27,888
|
|
|
2
|
|
Fairfax, VA
|
|
328,456
|
|
1750 H Street, NW
|
|
50%
|
|
19,696
|
|
|
22,314
|
|
|
1
|
|
Washington, D.C.
|
115,411
|
|||
|
Total
|
|
|
|
$
|
43,665
|
|
|
$
|
50,202
|
|
|
3
|
|
|
|
443,867
|
|
Joint Venture
|
|
Interest Rate
(1)
|
|
Maturity Date
|
|
Principal Balance
at December 31,
2018 and 2017
|
||
|
Prosperity Metro Plaza
|
|
4.09%
|
|
12/1/2029
|
|
$
|
50,000
|
|
|
1750 H Street, NW
|
|
3.69%
|
|
8/1/2024
|
|
32,000
|
|
|
|
Weighted Average/Total
|
|
3.93%
|
|
|
|
$
|
82,000
|
|
|
Acquisition
Date
|
|
Location
|
|
Number of Office Buildings
|
|
Square Feet
|
|
Purchase Price
|
|
Land
|
|
Building and Improvements
|
|
Other Assumed Assets
|
|||||||||
|
Jan 2017
|
|
Manassas, VA
|
|
1
|
|
69,374
|
|
|
$
|
12,657
|
|
|
$
|
1,562
|
|
|
$
|
8,253
|
|
|
$
|
2,842
|
|
|
Acquisition
Date
|
|
Location
|
|
Number of Office Buildings
|
|
Square Feet
|
|
Purchase Price
(1)
|
|
Land
|
|
Buildings and Improvements
|
|
Other Assumed Assets
|
|
Acquired Leases
|
|
Acquired Lease Obligations
|
|||||||||||||
|
Jan 2016
|
|
Sacramento, CA
(2)
|
|
1
|
|
337,811
|
|
|
$
|
79,508
|
|
|
$
|
4,688
|
|
|
$
|
61,995
|
|
|
$
|
2,167
|
|
|
$
|
11,245
|
|
|
$
|
(587
|
)
|
|
Jul 2016
|
|
Atlanta, GA
(3)
|
|
—
|
|
—
|
|
|
1,670
|
|
|
1,670
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Dec 2016
|
|
Rancho Cordova, CA
(2)
|
1
|
|
82,896
|
|
|
13,943
|
|
|
1,466
|
|
|
8,797
|
|
|
—
|
|
|
3,680
|
|
|
—
|
|
|||||||
|
Dec 2016
|
|
Chantilly, VA
(2)
|
|
3
|
|
409,478
|
|
|
104,183
|
|
|
6,966
|
|
|
74,214
|
|
|
—
|
|
|
23,003
|
|
|
—
|
|
||||||
|
|
|
|
|
5
|
|
830,185
|
|
|
$
|
199,304
|
|
|
$
|
14,790
|
|
|
$
|
145,006
|
|
|
$
|
2,167
|
|
|
$
|
37,928
|
|
|
$
|
(587
|
)
|
|
(1)
|
Excludes acquisition related costs.
|
|
(2)
|
Accounted for as a business combination.
|
|
(3)
|
On July 6, 2016, we acquired a land parcel adjacent to one of our existing properties for
$1,623
. We accounted for this transaction as an asset acquisition and capitalized acquisition related costs of
$47
.
|
|
Date of Sale
|
|
Number of Office Buildings
|
|
Location
|
|
Square
Feet
|
|
Gross
Sale Price
(1)
|
|||
|
Mar 2018
(2)
|
|
1
|
|
Minneapolis, MN
|
|
193,594
|
|
|
$
|
20,000
|
|
|
May 2018
(3)
|
|
1
|
|
New York, NY
|
|
187,060
|
|
|
118,500
|
|
|
|
May 2018
(4)
|
|
1
|
|
Sacramento, CA
|
|
110,500
|
|
|
10,755
|
|
|
|
Nov 2018
(5)
|
|
1
|
|
Golden, CO
|
|
43,231
|
|
|
4,000
|
|
|
|
Dec 2018
(6)
|
|
15
|
|
Southern Virginia
|
|
1,640,252
|
|
|
167,000
|
|
|
|
|
|
19
|
|
|
|
2,174,637
|
|
|
$
|
320,255
|
|
|
(1)
|
Gross sale price includes purchase price adjustments, if any, excludes closing costs.
|
|
(2)
|
We recorded a
$640
loss on impairment of real estate to reduce the carrying value of this property to its estimated fair value less costs to sell during the year ended
December 31, 2018
.
|
|
(3)
|
We recorded a
$17,249
gain on sale of real estate during the year ended
December 31, 2018
as a result of this sale.
|
|
(4)
|
We recorded a loss on impairment of real estate of
$3,029
to reduce the carrying value of this property to its estimated fair value less costs to sell during the year ended
December 31, 2018
.
|
|
(5)
|
We recorded a
$54
gain on sale of real estate during the year ended
December 31, 2018
as a result of this sale.
|
|
(6)
|
We recorded a
$3,358
gain on sale of real estate during the year ended
December 31, 2018
as a result of this sale.
|
|
Date of Sale Agreement
|
|
Number of Office Buildings
|
|
Location
|
|
Square
Feet
|
|
Gross
Sale Price
(1)
|
|||
|
Aug 2018
(2)
|
|
1
|
|
Washington, D.C.
|
|
129,035
|
|
|
$
|
70,000
|
|
|
Sep 2018
(3)
|
|
34
|
|
Northern Virginia and Maryland
|
|
1,635,868
|
|
|
198,500
|
|
|
|
Nov 2018
(2)(4)
|
|
1
|
|
Kapolei, HI
|
|
416,956
|
|
|
7,100
|
|
|
|
|
|
36
|
|
|
|
2,181,859
|
|
|
$
|
275,600
|
|
|
(1)
|
Gross sale price includes purchase price adjustments, if any, excludes closing costs.
|
|
(2)
|
These pending sales are subject to conditions; accordingly, we cannot be sure that we will complete these sales or that these sales will not be delayed or their terms will not change.
|
|
(3)
|
We recorded a
$2,830
loss on impairment of real estate to reduce the carrying value of these buildings to their estimated fair value less costs to sell during the year ended
December 31, 2018
. On February 8, 2019, we completed the sale of these buildings.
|
|
(4)
|
Represents a land parcel acquired from SIR in the SIR Merger.
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2017
|
|
2016
|
||||
|
Rental income
|
|
$
|
17
|
|
|
$
|
68
|
|
|
Real estate taxes
|
|
(88
|
)
|
|
(97
|
)
|
||
|
Utility expenses
|
|
(97
|
)
|
|
(146
|
)
|
||
|
Other operating expenses
|
|
(202
|
)
|
|
(300
|
)
|
||
|
General and administrative
|
|
(76
|
)
|
|
(114
|
)
|
||
|
Increase in carrying value of property included in discontinued operations
|
|
619
|
|
|
—
|
|
||
|
Income (loss) from discontinued operations
|
|
$
|
173
|
|
|
$
|
(589
|
)
|
|
Year
|
|
Minimum Lease Payments
|
||
|
2019
|
|
$
|
569,874
|
|
|
2020
|
|
514,551
|
|
|
|
2021
|
|
479,401
|
|
|
|
2022
|
|
434,135
|
|
|
|
2023
|
|
383,695
|
|
|
|
Thereafter
|
|
1,236,540
|
|
|
|
|
|
$
|
3,618,196
|
|
|
Year
|
|
Minimum Rental Payments
|
||
|
2019
|
|
$
|
1,584
|
|
|
2020
|
|
1,627
|
|
|
|
2021
|
|
139
|
|
|
|
|
|
$
|
3,350
|
|
|
•
|
Base Management Fee.
The annual base management fee payable to RMR LLC by us for each applicable period is equal to the lesser of:
|
|
•
|
the sum of (a)
0.5%
of the average aggregate historical cost of the real estate assets acquired from a REIT to which RMR LLC provided business management or property management services, or the Transferred Assets, plus (b)
0.7%
of the average aggregate historical cost of our real estate investments excluding the Transferred Assets up to
$250,000
, plus (c)
0.5%
of the average aggregate historical cost of our real estate investments excluding the Transferred Assets exceeding
$250,000
; and
|
|
•
|
the sum of (a)
0.7%
of the average closing price per share of our common shares on the stock exchange on which such shares are principally traded during such period, multiplied by the average number of our common shares outstanding during such period, plus the daily weighted average of the aggregate liquidation preference of each class of our preferred shares outstanding during such period, plus the daily weighted average of the aggregate principal amount of our consolidated indebtedness during such period, or, together, our Average Market Capitalization, up to
$250,000
, plus (b)
0.5%
of our Average Market Capitalization exceeding
$250,000
.
|
|
•
|
Incentive Management Fee
. The incentive management fee which may be earned by RMR LLC for an annual period is calculated as follows:
|
|
•
|
An amount, subject to a cap based on the value of our common shares outstanding, equal to
12%
of the product of:
|
|
•
|
our equity market capitalization on the last trading day of the year immediately prior to the relevant
three
year measurement period, and
|
|
•
|
the amount (expressed as a percentage) by which the total return per share, as defined in the business management agreement and further described below, of our common shareholders (i.e., share price appreciation plus dividends) exceeds the total shareholder return of the applicable index, or the benchmark return per share, for the relevant measurement period. Effective as of January 1, 2019, we amended our business management agreement with RMR LLC so that the SNL U.S. Office REIT Index will be used for periods beginning on and after January 1, 2019, with the SNL U.S. REIT Equity Index for periods ending on or prior to December 31, 2018.
|
|
•
|
The calculation of the incentive management fee (including the determinations of our equity market capitalization, initial share price and the total return per share of our common shareholders) is subject to adjustments if additional common shares are issued during the measurement period.
|
|
•
|
No incentive management fee is payable by us unless our total return per share during the measurement period is positive.
|
|
•
|
The measurement periods are
three
year periods ending with the year for which the incentive management fee is being calculated.
|
|
•
|
If our total return per share exceeds
12%
per year in any measurement period, the benchmark return per share is adjusted to be the lesser of the total shareholder return of the applicable index for such measurement period and
12%
per year, or the adjusted benchmark return per share. In instances where the adjusted benchmark return per share applies, the incentive management fee will be reduced if our total return per share is between 200 basis points and 500 basis points below the applicable index by a low return factor, as defined in the business management agreement, and there will be no incentive management fee paid if, in these instances, our total return per share is more than 500 basis points below the applicable index.
|
|
•
|
The incentive management fee is subject to a cap. The cap is equal to the value of the number of our common shares which would, after issuance, represent
1.5%
of the number of our common shares then outstanding multiplied by the average closing price of our common shares during the
10
consecutive trading days having the highest average closing prices during the final
30
trading days of the relevant measurement period.
|
|
•
|
Incentive management fees we paid to RMR LLC for any period may be subject to “clawback” if our financial statements for that period are restated due to material non-compliance with any financial reporting requirements under the securities laws as a result of the bad faith, fraud, willful misconduct or gross negligence of RMR LLC and the amount of the incentive management fee we paid was greater than the amount we would have paid based on the restated financial statements.
|
|
•
|
Property Management and Construction Supervision Fees
. The property management fees payable to RMR LLC by us for each applicable period are equal to
3.0%
of gross collected rents and the construction supervision fees payable to RMR LLC by us for each applicable period are equal to
5.0%
of construction costs.
|
|
•
|
Term
. Our management agreements with RMR LLC have terms that end on December 31, 2038, and automatically extend on December 31st of each year for an additional year, so that the terms of our management agreements thereafter end on the 20th anniversary of the date of the extension.
|
|
•
|
Termination Rights
. We have the right to terminate one or both of our management agreements with RMR LLC: (i) at any time on
60
days’ written notice for convenience, (ii) immediately on written notice for cause, as defined therein, (iii) on written notice given within
60
days after the end of an applicable calendar year for a performance reason, as defined therein, and (iv) by written notice during the
12
months following a change of control of RMR LLC, as defined therein. RMR LLC has the right to terminate the management agreements for good reason, as defined therein.
|
|
•
|
Termination Fee.
If we terminate one or both of our management agreements with RMR LLC for convenience, or if RMR LLC terminates one or both of our management agreements for good reason, we have agreed to pay RMR LLC a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the terminated management agreement(s) for the term that was remaining prior to such termination, which, depending on the time of termination, would be between
19
and
20
years. If we terminate one or both of
|
|
•
|
Transition Services.
RMR LLC has agreed to provide certain transition services to us for
120
days following an applicable termination by us or notice of termination by RMR LLC, including cooperating with us and using commercially reasonable efforts to facilitate the orderly transfer of the management and real estate investment services provided under our business management agreement and to facilitate the orderly transfer of the management of the managed properties under our property management agreement, as applicable.
|
|
•
|
Vendors.
Pursuant to our management agreements with RMR LLC, RMR LLC may from time to time negotiate on our behalf with certain third party vendors and suppliers for the procurement of goods and services to us. As part of this arrangement, we may enter agreements with RMR LLC and other companies to which RMR LLC or its subsidiaries provide management services for the purpose of obtaining more favorable terms from such vendors and suppliers.
|
|
•
|
Investment Opportunities
. Under our business management agreement with RMR LLC, we acknowledge that RMR LLC may engage in other activities or businesses and act as the manager to any other person or entity (including other REITs) even though such person or entity has investment policies and objectives similar to ours and we are not entitled to preferential treatment in receiving information, recommendations and other services from RMR LLC.
|
|
|
|
December 31,
|
||||||
|
|
|
2018
|
|
2017
|
||||
|
Revolving credit facility, due in 2023
|
|
$
|
175,000
|
|
|
$
|
570,000
|
|
|
Unsecured term loan, due in 2020
|
|
300,000
|
|
|
300,000
|
|
||
|
Unsecured term loan, due in 2022
(1)
|
|
88,000
|
|
|
250,000
|
|
||
|
Senior unsecured notes, 3.750% interest rate, due in 2019
|
|
350,000
|
|
|
350,000
|
|
||
|
Senior unsecured notes, 3.600% interest rate, due in 2020
(2)
|
|
400,000
|
|
|
—
|
|
||
|
Senior unsecured notes, 4.000% interest rate, due in 2022
|
|
300,000
|
|
|
300,000
|
|
||
|
Senior unsecured notes, 4.150% interest rate, due in 2022
(2)
|
|
300,000
|
|
|
—
|
|
||
|
Senior unsecured notes, 4.250% interest rate, due in 2024
(2)
|
|
350,000
|
|
|
—
|
|
||
|
Senior unsecured notes, 4.500% interest rate, due in 2025
(2)
|
|
400,000
|
|
|
—
|
|
||
|
Senior unsecured notes, 5.875% interest rate, due in 2046
|
|
310,000
|
|
|
310,000
|
|
||
|
Mortgage note payable, 7.000% interest rate, due in 2019
(3)
|
|
7,939
|
|
|
8,221
|
|
||
|
Mortgage note payable, 5.720% interest rate, due in 2020
(3)
|
|
33,703
|
|
|
34,474
|
|
||
|
Mortgage note payable, 4.260% interest rate, due in 2020
(3)(4)
|
|
—
|
|
|
3,173
|
|
||
|
Mortgage note payable, 4.160% interest rate, due in 2020
(2)(3)
|
|
40,772
|
|
|
—
|
|
||
|
Mortgage note payable, 8.150% interest rate, due in 2021
(3)
|
|
2,912
|
|
|
4,045
|
|
||
|
Mortgage note payable, 5.877% interest rate, due in 2021
(3)
|
|
13,437
|
|
|
13,693
|
|
||
|
Mortgage note payable, 4.220% interest rate, due in 2022
(3)
|
|
27,210
|
|
|
27,870
|
|
||
|
Mortgage note payable, 3.550% interest rate, due in 2023
(2)(3)
|
|
71,000
|
|
|
—
|
|
||
|
Mortgage note payable, 3.700% interest rate, due in 2023
(2)(3)
|
|
50,000
|
|
|
—
|
|
||
|
Mortgage note payable, 4.800% interest rate, due in 2023
(3)
|
|
24,509
|
|
|
24,891
|
|
||
|
Mortgage note payable, 4.050% interest rate, due in 2030
(3)
|
|
66,780
|
|
|
66,780
|
|
||
|
|
|
3,311,262
|
|
|
2,263,147
|
|
||
|
Unamortized debt premiums, discounts and issuance costs
|
|
(56,372
|
)
|
|
(18,055
|
)
|
||
|
|
|
$
|
3,254,890
|
|
|
$
|
2,245,092
|
|
|
(1)
|
On December 18, 2018, we made a partial principal payment of
$162,000
without penalty using proceeds from the sale of a property portfolio of
15
office buildings located in southern Virginia. As a result of this repayment, we recognized a loss on early extinguishment of debt of
$625
for the year ended
December 31, 2018
to write off a proportionate amount of unamortized debt issuance costs. On February 11, 2019, we repaid the remaining outstanding principal balance of
$88,000
without penalty using proceeds from the sale of a property portfolio located in Northern Virginia and Maryland.
|
|
(2)
|
As described in Notes 1 and 5, in connection with the SIR Merger, we assumed all of SIR's outstanding senior unsecured notes and mortgage notes on December 31, 2018.
|
|
(3)
|
We assumed these mortgage notes in connection with our acquisitions of the encumbered properties. The stated interest rates for these mortgage debts are the contractually stated rates; we recorded the assumed mortgages at estimated fair value on the dates of acquisition, and we amortize the fair value premiums to interest expense over the respective terms of the mortgage notes to reduce interest expense to the estimated market interest rates as of the dates of acquisition.
|
|
(4)
|
This mortgage note was secured by a property in southern Virginia that was sold on December 14, 2018. The mortgage note was repaid at closing and we recognized a loss on early extinguishment of debt of
$60
for the year ended
December 31, 2018
.
|
|
Year
|
|
Principal Payment
|
|
|
|
|
2019
|
|
$
|
362,054
|
|
|
|
2020
|
|
775,707
|
|
|
|
|
2021
|
|
14,420
|
|
|
|
|
2022
|
|
713,518
|
|
|
|
|
2023
|
|
318,783
|
|
|
|
|
Thereafter
|
|
1,126,780
|
|
|
|
|
|
|
$
|
3,311,262
|
|
(1)
|
|
(1)
|
Total consolidated debt outstanding as of
December 31, 2018
, net of unamortized premiums, discounts and issuance costs totaling
$56,372
was
$3,254,890
.
|
|
|
|
|
|
Fair Value at Reporting Date Using
|
||||||||||||
|
|
|
|
|
Quoted Prices in
Active Markets for Identical Assets
|
|
Significant Other
Observable Inputs
|
|
Significant
Unobservable Inputs
|
||||||||
|
Description
|
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
|
Recurring Fair Value Measurements Assets:
|
|
|
|
|
|
|
|
|
||||||||
|
Investment in RMR Inc.
(1)
|
|
$
|
148,680
|
|
|
$
|
148,680
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Non-Recurring Fair Value Measurements Assets:
|
|
|
|
|
|
|
|
|
|
|||||||
|
Assets of properties held for sale
(2)
|
|
$
|
195,107
|
|
|
$
|
—
|
|
|
$
|
195,107
|
|
|
$
|
—
|
|
|
(1)
|
As of December 31, 2018, we owned
2,801,061
shares of class A common stock of RMR Inc., including
1,214,225
shares acquired in 2015 with a historical cost basis of
$26,888
, and
1,586,836
shares acquired from SIR in the SIR Merger with a cost basis of
$84,229
. Our shares of class A common stock of RMR Inc. are included in other assets in our consolidated balance sheets and are reported at fair value based on quoted market prices (Level 1 inputs as defined in the fair value hierarchy under GAAP). During the year ended
December 31, 2018
, we recorded an unrealized loss of
$7,552
for the shares acquired in 2015 to adjust our investment in RMR Inc. to its fair value. As discussed in Note 5, the shares we acquired from SIR in the SIR Merger were recorded at fair value on December 31, 2018.
|
|
(2)
|
We estimated the fair value of a property portfolio consisting of
34
buildings we agreed to sell located in Northern Virginia and Maryland at December 31, 2018 based on the selling price agreed to with a third party (Level 2 inputs as defined in the fair value hierarchy under GAAP). See Note 5 for further details.
|
|
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||
|
Financial Instrument
|
|
Carrying Value
(1)
|
|
Fair Value
|
|
Carrying Value
(1)
|
|
Fair Value
|
||||||||
|
Senior unsecured notes, 3.750% interest rate, due in 2019
|
|
$
|
349,239
|
|
|
$
|
348,903
|
|
|
$
|
348,096
|
|
|
$
|
354,993
|
|
|
Senior unsecured notes, 3.60% interest rate, due in 2020
|
|
399,146
|
|
|
399,146
|
|
|
—
|
|
|
—
|
|
||||
|
Senior unsecured notes, 4.00% interest rate, due in 2022
|
|
296,735
|
|
|
295,047
|
|
|
295,812
|
|
|
302,655
|
|
||||
|
Senior unsecured notes, 4.15% interest rate, due in 2022
|
|
296,736
|
|
|
296,736
|
|
|
—
|
|
|
—
|
|
||||
|
Senior unsecured notes, 4.25% interest rate, due in 2024
|
|
337,736
|
|
|
337,736
|
|
|
—
|
|
|
—
|
|
||||
|
Senior unsecured notes, 4.50% interest rate, due in 2025
|
|
377,329
|
|
|
377,329
|
|
|
—
|
|
|
—
|
|
||||
|
Senior unsecured notes, 5.875% interest rate, due in 2046
|
|
300,576
|
|
|
274,288
|
|
|
300,232
|
|
|
320,416
|
|
||||
|
Mortgage notes payable
|
|
335,241
|
|
|
336,365
|
|
|
183,100
|
|
|
186,542
|
|
||||
|
Total
|
|
$
|
2,692,738
|
|
|
$
|
2,665,550
|
|
|
$
|
1,127,240
|
|
|
$
|
1,164,606
|
|
|
(1)
|
Includes unamortized debt premiums, discounts and issuance costs.
|
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
|
Unvested at beginning of year
|
|
26,062
|
|
|
$78.24
|
|
24,743
|
|
|
$82.36
|
|
24,181
|
|
|
$80.44
|
|
Granted
|
|
19,925
|
|
|
$64.73
|
|
18,837
|
|
|
$77.44
|
|
16,475
|
|
|
$86.64
|
|
Forfeited
|
|
(255
|
)
|
|
$52.96
|
|
—
|
|
|
$—
|
|
—
|
|
|
$—
|
|
Vested
|
|
(18,634
|
)
|
|
$63.80
|
|
(17,518
|
)
|
|
$83.20
|
|
(15,913
|
)
|
|
$83.88
|
|
Unvested acquired in the SIR Merger
(1)
|
|
28,223
|
|
|
$27.48
|
|
—
|
|
|
$—
|
|
—
|
|
|
$—
|
|
Unvested at end of year
|
|
55,321
|
|
|
$73.25
|
|
26,062
|
|
|
$78.24
|
|
24,743
|
|
|
$82.36
|
|
(1)
|
Represents unvested shares granted under SIR's equity compensation plan that were converted at the Exchange Ratio into shares under the 2009 Plan, and which will have similar vesting requirements as shares granted under the 2009 Plan, as described in Note 1.
|
|
|
|
Annual Per Share Distribution
|
|
Total Distribution
|
|
Characterization of Distribution
|
||||||
|
Year
|
|
|
|
Return of Capital
|
|
Ordinary Income
|
|
Qualified Dividend
|
||||
|
2018
|
|
$6.88
|
|
$
|
170,566
|
|
|
68.60%
|
|
31.40%
|
|
—%
|
|
2017
|
|
$6.88
|
|
$
|
145,209
|
|
|
49.35%
|
|
50.65%
|
|
—%
|
|
2016
|
|
$6.88
|
|
$
|
122,366
|
|
|
36.21%
|
|
62.74%
|
|
1.05%
|
|
|
Unrealized Gain (Loss) on
Investment in
Equity Securities
|
|
Equity in
Unrealized Gains
(Losses) of
Investees
(1)
|
|
Total
|
||||||
|
Balance at December 31, 2015
|
$
|
(9,391
|
)
|
|
$
|
(5,476
|
)
|
|
$
|
(14,867
|
)
|
|
Other comprehensive income before reclassifications
|
30,465
|
|
|
11,254
|
|
|
41,719
|
|
|||
|
Amounts reclassified from cumulative other
|
|
|
|
|
|
||||||
|
comprehensive income to net income
|
—
|
|
|
105
|
|
|
105
|
|
|||
|
Net current period other comprehensive income
|
30,465
|
|
|
11,359
|
|
|
41,824
|
|
|||
|
Balance at December 31, 2016
|
21,074
|
|
|
5,883
|
|
|
26,957
|
|
|||
|
Other comprehensive income before reclassifications
|
24,042
|
|
|
9,462
|
|
|
33,504
|
|
|||
|
Amounts reclassified from cumulative other
|
|
|
|
|
|
||||||
|
comprehensive income to net income
|
—
|
|
|
(34
|
)
|
|
(34
|
)
|
|||
|
Net current period other comprehensive income
|
24,042
|
|
|
9,428
|
|
|
33,470
|
|
|||
|
Balance at December 31, 2017
|
45,116
|
|
|
15,311
|
|
|
60,427
|
|
|||
|
Amounts reclassified from cumulative
|
|
|
|
|
|
||||||
|
other comprehensive income to cumulative net income
|
(45,116
|
)
|
|
(15,165
|
)
|
|
(60,281
|
)
|
|||
|
Balance at January 1, 2018
|
—
|
|
|
146
|
|
|
146
|
|
|||
|
Other comprehensive income before reclassifications
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||
|
Amounts reclassified from cumulative other
|
|
|
|
|
|
||||||
|
comprehensive income to net income
|
—
|
|
|
(37
|
)
|
|
(37
|
)
|
|||
|
Net current period other comprehensive income
|
—
|
|
|
(40
|
)
|
|
(40
|
)
|
|||
|
Balance at December 31, 2018
|
$
|
—
|
|
|
$
|
106
|
|
|
$
|
106
|
|
|
(1)
|
Amounts reclassified from cumulative other comprehensive income (loss) to net income (loss) is included in equity in net earnings (losses) of investees in our consolidated statements of comprehensive income (loss).
|
|
|
December 31,
|
|||
|
|
|
2017
|
||
|
Real estate properties, net
|
|
$
|
3,905,616
|
|
|
Properties held for sale
|
|
5,829
|
|
|
|
Acquired real estate leases, net
|
|
477,577
|
|
|
|
Cash and cash equivalents
|
|
658,719
|
|
|
|
Rents receivable, net
|
|
127,672
|
|
|
|
Other assets, net
|
|
127,617
|
|
|
|
Total assets
|
|
$
|
5,303,030
|
|
|
|
|
|
||
|
ILPT revolving credit facility
|
|
$
|
750,000
|
|
|
Unsecured term loan, net
|
|
348,870
|
|
|
|
Senior unsecured notes, net
|
|
1,777,425
|
|
|
|
Mortgage notes payable, net
|
|
210,785
|
|
|
|
Assumed real estate lease obligations, net
|
|
68,783
|
|
|
|
Other liabilities
|
|
155,348
|
|
|
|
Total shareholders' equity
|
|
1,991,819
|
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
5,303,030
|
|
|
|
|
Nine Months Ended September 30,
|
|
Year Ended December 31,
|
||||||||
|
REVENUES:
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Rental income
|
|
$
|
298,003
|
|
|
$
|
392,285
|
|
|
$
|
387,015
|
|
|
Tenant reimbursements and other income
|
|
60,514
|
|
|
75,818
|
|
|
74,992
|
|
|||
|
Total revenues
|
|
358,517
|
|
|
468,103
|
|
|
462,007
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
EXPENSES:
|
|
|
|
|
|
|
||||||
|
Real estate taxes
|
|
36,748
|
|
|
44,131
|
|
|
42,879
|
|
|||
|
Other operating expenses
|
|
43,714
|
|
|
55,567
|
|
|
52,957
|
|
|||
|
Depreciation and amortization
|
|
105,326
|
|
|
137,672
|
|
|
133,762
|
|
|||
|
Acquisition and transaction related costs
|
|
3,796
|
|
|
1,075
|
|
|
306
|
|
|||
|
General and administrative
|
|
47,353
|
|
|
54,909
|
|
|
28,632
|
|
|||
|
Write-off of straight line rents, net
|
|
10,626
|
|
|
12,517
|
|
|
—
|
|
|||
|
Loss on asset impairment
|
|
—
|
|
|
4,047
|
|
|
—
|
|
|||
|
Loss on impairment of real estate assets
|
|
9,706
|
|
|
229
|
|
|
5,484
|
|
|||
|
Total expenses
|
|
257,269
|
|
|
310,147
|
|
|
264,020
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Gain on sale of real estate
|
|
4,075
|
|
|
—
|
|
|
—
|
|
|||
|
Dividend income
|
|
1,190
|
|
|
1,587
|
|
|
1,268
|
|
|||
|
Unrealized gain on equity securities
|
|
53,159
|
|
|
—
|
|
|
—
|
|
|||
|
Interest income
|
|
753
|
|
|
91
|
|
|
30
|
|
|||
|
Interest expense
|
|
(69,446
|
)
|
|
(92,870
|
)
|
|
(82,620
|
)
|
|||
|
Loss on early extinguishment of debt
|
|
(1,192
|
)
|
|
—
|
|
|
—
|
|
|||
|
Income before income tax expense and equity in earnings of an investee
|
|
89,787
|
|
|
66,764
|
|
|
116,665
|
|
|||
|
Income tax expense
|
|
(446
|
)
|
|
(466
|
)
|
|
(448
|
)
|
|||
|
Equity in earnings of an investee
|
|
882
|
|
|
608
|
|
|
137
|
|
|||
|
Net income
|
|
90,223
|
|
|
66,906
|
|
|
116,354
|
|
|||
|
Net income allocated to noncontrolling interest
|
|
(15,841
|
)
|
|
—
|
|
|
(33
|
)
|
|||
|
Net income attributed to SIR
|
|
$
|
74,382
|
|
|
$
|
66,906
|
|
|
$
|
116,321
|
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average common shares outstanding (basic)
|
|
89,395
|
|
|
89,351
|
|
|
89,304
|
|
|||
|
Weighted average common shares outstanding (diluted)
|
|
89,411
|
|
|
89,370
|
|
|
$
|
89,324
|
|
||
|
Net income attributed to SIR per common share (basic and diluted)
|
|
$
|
0.83
|
|
|
$
|
0.75
|
|
|
$
|
1.30
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Equity in earnings of Select Income REIT
|
|
$
|
24,358
|
|
|
$
|
21,584
|
|
|
$
|
35,381
|
|
|
Net gain on issuance of shares by Select Income REIT
|
|
29
|
|
|
72
|
|
|
86
|
|
|||
|
Loss on sale of Select Income REIT shares
|
|
(18,665
|
)
|
|
—
|
|
|
—
|
|
|||
|
Income (loss) from property discontinued operations
|
|
—
|
|
|
173
|
|
|
(589
|
)
|
|||
|
Income from discontinued operations
|
|
$
|
5,722
|
|
|
$
|
21,829
|
|
|
$
|
34,878
|
|
|
|
2018
|
||||||||||||||
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
Rental income
|
$
|
108,717
|
|
|
$
|
108,085
|
|
|
$
|
106,102
|
|
|
$
|
103,656
|
|
|
Net income (loss) available for common shareholders
|
$
|
6,287
|
|
|
$
|
29,602
|
|
|
$
|
(449
|
)
|
|
$
|
(57,695
|
)
|
|
Net income (loss) available for common shareholders per common share (basic and diluted)
|
$
|
0.25
|
|
|
$
|
1.20
|
|
|
$
|
(0.02
|
)
|
|
$
|
(2.31
|
)
|
|
Common distributions declared
|
$
|
1.72
|
|
|
$
|
1.72
|
|
|
$
|
1.72
|
|
|
$
|
1.72
|
|
|
|
2017
|
||||||||||||||
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
|
Rental income
|
$
|
69,296
|
|
|
$
|
69,887
|
|
|
$
|
70,179
|
|
|
$
|
107,170
|
|
|
Net income (loss) available for common shareholders
|
$
|
7,415
|
|
|
$
|
11,677
|
|
|
$
|
10,989
|
|
|
$
|
(18,266
|
)
|
|
Net income (loss) available for common shareholders per common share (basic and diluted)
|
$
|
0.42
|
|
|
$
|
0.66
|
|
|
$
|
0.45
|
|
|
$
|
(0.74
|
)
|
|
Common distributions declared
|
$
|
1.72
|
|
|
$
|
1.72
|
|
|
$
|
1.72
|
|
|
$
|
1.72
|
|
|
|
|
|
|
|
|
|
|
Initial Cost to Company
|
|
Costs Capitalized Subsequent to Acquisition
|
|
|
|
Cost amount carried at Close of Period
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Property
|
|
Location
|
|
Number of Buildings
|
|
Encumbrances
(1)
|
|
Land
|
|
Buildings
and Equipment |
|
|
Impairments/
Writedowns |
|
Land
|
|
Buildings
and Equipment |
|
Total
(2)
|
|
Accumulated
Depreciation (3) |
|
Date(s)
Acquired |
|
Original
Construction Date(s) |
|||||||||||||||||||
|
Inverness Center
|
|
Birmingham, AL
|
|
3
|
|
$
|
—
|
|
|
$
|
5,954
|
|
|
$
|
11,664
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,954
|
|
|
$
|
11,664
|
|
|
$
|
17,618
|
|
|
$
|
—
|
|
|
12/31/2018
|
|
1984; 1985
|
|
445 Jan Davis Drive
|
|
Huntsville, AL
|
|
1
|
|
—
|
|
|
1,513
|
|
|
1,503
|
|
|
—
|
|
|
—
|
|
|
1,513
|
|
|
1,503
|
|
|
3,016
|
|
|
—
|
|
|
12/31/2018
|
|
2007
|
|||||||||
|
4905 Moores Mill Road
|
|
Huntsville, AL
|
|
1
|
|
—
|
|
|
4,628
|
|
|
36,612
|
|
|
—
|
|
|
—
|
|
|
4,628
|
|
|
36,612
|
|
|
41,240
|
|
|
—
|
|
|
12/31/2018
|
|
1979
|
|||||||||
|
131 Clayton Street
|
|
Montgomery, AL
|
|
1
|
|
—
|
|
|
920
|
|
|
9,084
|
|
|
48
|
|
|
—
|
|
|
920
|
|
|
9,132
|
|
|
10,052
|
|
|
(1,708
|
)
|
|
6/22/2011
|
|
2007
|
|||||||||
|
4344 Carmichael Road
|
|
Montgomery, AL
|
|
1
|
|
—
|
|
|
1,374
|
|
|
11,658
|
|
|
10
|
|
|
—
|
|
|
1,374
|
|
|
11,668
|
|
|
13,042
|
|
|
(1,458
|
)
|
|
12/17/2013
|
|
2009
|
|||||||||
|
15451 North 28th Avenue
|
|
Phoenix, AZ
|
|
1
|
|
—
|
|
|
1,917
|
|
|
7,416
|
|
|
499
|
|
|
—
|
|
|
1,917
|
|
|
7,915
|
|
|
9,832
|
|
|
(836
|
)
|
|
9/10/2014
|
|
1996
|
|||||||||
|
16001 North 28th Avenue
|
|
Phoenix, AZ
|
|
1
|
|
—
|
|
|
3,382
|
|
|
416
|
|
|
—
|
|
|
—
|
|
|
3,382
|
|
|
416
|
|
|
3,798
|
|
|
—
|
|
|
12/31/2018
|
|
1998
|
|||||||||
|
2149 West Dunlap Avenue
|
|
Phoenix, AZ
|
|
1
|
|
—
|
|
|
6,606
|
|
|
218
|
|
|
—
|
|
|
—
|
|
|
6,606
|
|
|
218
|
|
|
6,824
|
|
|
—
|
|
|
12/31/2018
|
|
1983
|
|||||||||
|
711 S 14th Avenue
|
|
Safford, AZ
|
|
1
|
|
—
|
|
|
460
|
|
|
11,708
|
|
|
484
|
|
|
(4,440
|
)
|
|
364
|
|
|
7,848
|
|
|
8,212
|
|
|
(190
|
)
|
|
6/16/2010
|
|
1992
|
|||||||||
|
Regents Center
|
|
Tempe, AZ
|
|
2
|
|
—
|
|
|
4,154
|
|
|
3,066
|
|
|
—
|
|
|
—
|
|
|
4,154
|
|
|
3,066
|
|
|
7,220
|
|
|
—
|
|
|
12/31/2018
|
|
1988
|
|||||||||
|
Campbell Place
|
|
Carlsbad, CA
|
|
2
|
|
—
|
|
|
5,815
|
|
|
3,902
|
|
|
—
|
|
|
—
|
|
|
5,815
|
|
|
3,902
|
|
|
9,717
|
|
|
—
|
|
|
12/31/2018
|
|
2007
|
|||||||||
|
Folsom Corporate Center
|
|
Folsom, CA
|
|
1
|
|
—
|
|
|
2,927
|
|
|
5,628
|
|
|
—
|
|
|
—
|
|
|
2,927
|
|
|
5,628
|
|
|
8,555
|
|
|
—
|
|
|
12/31/2018
|
|
2008
|
|||||||||
|
Bayside Technology Park
|
|
Fremont, CA
|
|
1
|
|
—
|
|
|
10,869
|
|
|
653
|
|
|
—
|
|
|
—
|
|
|
10,869
|
|
|
653
|
|
|
11,522
|
|
|
—
|
|
|
12/31/2018
|
|
1990
|
|||||||||
|
5045 East Butler Street
|
|
Fresno, CA
|
|
1
|
|
—
|
|
|
7,276
|
|
|
61,118
|
|
|
139
|
|
|
—
|
|
|
7,276
|
|
|
61,257
|
|
|
68,533
|
|
|
(25,031
|
)
|
|
8/29/2002
|
|
1971
|
|||||||||
|
10949 N. Mather Boulevard
|
|
Rancho Cordova, CA
|
|
1
|
|
—
|
|
|
562
|
|
|
16,923
|
|
|
359
|
|
|
—
|
|
|
562
|
|
|
17,282
|
|
|
17,844
|
|
|
(2,201
|
)
|
|
10/30/2013
|
|
2012
|
|||||||||
|
11020 Sun Center Drive
|
|
Rancho Cordova, CA
|
|
1
|
|
64,490
|
|
|
1,466
|
|
|
8,797
|
|
|
671
|
|
|
—
|
|
|
1,466
|
|
|
9,468
|
|
|
10,934
|
|
|
(513
|
)
|
|
12/20/2016
|
|
1983
|
|||||||||
|
100 Redwood Shores Parkway
|
|
Redwood City, CA
|
|
1
|
|
—
|
|
|
14,568
|
|
|
7,783
|
|
|
—
|
|
|
—
|
|
|
14,568
|
|
|
7,783
|
|
|
22,351
|
|
|
—
|
|
|
12/31/2018
|
|
1993
|
|||||||||
|
3875 Atherton Road
|
|
Rocklin, CA
|
|
1
|
|
—
|
|
|
178
|
|
|
860
|
|
|
—
|
|
|
—
|
|
|
178
|
|
|
860
|
|
|
1,038
|
|
|
—
|
|
|
12/31/2018
|
|
1991
|
|||||||||
|
801 K Street
|
|
Sacramento, CA
|
|
1
|
|
—
|
|
|
4,688
|
|
|
61,995
|
|
|
6,275
|
|
|
—
|
|
|
4,688
|
|
|
68,270
|
|
|
72,958
|
|
|
(5,922
|
)
|
|
1/29/2016
|
|
1989
|
|||||||||
|
9815 Goethe Road
|
|
Sacramento, CA
|
|
1
|
|
—
|
|
|
1,450
|
|
|
9,465
|
|
|
1,523
|
|
|
—
|
|
|
1,450
|
|
|
10,988
|
|
|
12,438
|
|
|
(2,019
|
)
|
|
9/14/2011
|
|
1992
|
|||||||||
|
Capitol Place
|
|
Sacramento, CA
|
|
1
|
|
—
|
|
|
2,290
|
|
|
35,891
|
|
|
7,885
|
|
|
—
|
|
|
2,290
|
|
|
43,776
|
|
|
46,066
|
|
|
(10,059
|
)
|
|
12/17/2009
|
|
1988
|
|||||||||
|
4181 Ruffin Road
|
|
San Diego, CA
|
|
1
|
|
—
|
|
|
5,250
|
|
|
10,549
|
|
|
5,076
|
|
|
—
|
|
|
5,250
|
|
|
15,625
|
|
|
20,875
|
|
|
(3,914
|
)
|
|
7/16/2010
|
|
1981
|
|||||||||
|
4560 Viewridge Road
|
|
San Diego, CA
|
|
1
|
|
—
|
|
|
4,269
|
|
|
18,316
|
|
|
4,319
|
|
|
—
|
|
|
4,347
|
|
|
22,557
|
|
|
26,904
|
|
|
(10,672
|
)
|
|
3/31/1997
|
|
1996
|
|||||||||
|
9174 Sky Park Centre
|
|
San Diego, CA
|
|
1
|
|
7,983
|
|
|
685
|
|
|
5,530
|
|
|
2,708
|
|
|
—
|
|
|
685
|
|
|
8,238
|
|
|
8,923
|
|
|
(3,246
|
)
|
|
6/24/2002
|
|
1986
|
|||||||||
|
2090 Fortune Drive
|
|
San Jose, CA
|
|
1
|
|
—
|
|
|
9,074
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,074
|
|
|
—
|
|
|
9,074
|
|
|
—
|
|
|
12/31/2018
|
|
1996
|
|||||||||
|
2115 O’Nel Drive
|
|
San Jose, CA
|
|
1
|
|
—
|
|
|
12,402
|
|
|
5,103
|
|
|
—
|
|
|
—
|
|
|
12,402
|
|
|
5,103
|
|
|
17,505
|
|
|
—
|
|
|
12/31/2018
|
|
1984
|
|||||||||
|
6448-6450 Via Del Oro
|
|
San Jose, CA
|
|
1
|
|
—
|
|
|
4,747
|
|
|
2,027
|
|
|
—
|
|
|
—
|
|
|
4,747
|
|
|
2,027
|
|
|
6,774
|
|
|
—
|
|
|
12/31/2018
|
|
1983
|
|||||||||
|
North First Street
|
|
San Jose, CA
|
|
1
|
|
—
|
|
|
8,377
|
|
|
4,035
|
|
|
—
|
|
|
—
|
|
|
8,377
|
|
|
4,035
|
|
|
12,412
|
|
|
—
|
|
|
12/31/2018
|
|
1984
|
|||||||||
|
Rio Robles Drive
|
|
San Jose, CA
|
|
3
|
|
—
|
|
|
23,874
|
|
|
13,806
|
|
|
—
|
|
|
—
|
|
|
23,874
|
|
|
13,806
|
|
|
37,680
|
|
|
—
|
|
|
12/31/2018
|
|
1984
|
|||||||||
|
2450 and 2500 Walsh Avenue
|
|
Santa Clara, CA
|
|
2
|
|
—
|
|
|
13,480
|
|
|
16,783
|
|
|
—
|
|
|
—
|
|
|
13,480
|
|
|
16,783
|
|
|
30,263
|
|
|
—
|
|
|
12/31/2018
|
|
1982
|
|||||||||
|
|
|
|
|
|
|
|
|
Initial Cost to Company
|
|
Costs Capitalized Subsequent to Acquisition
|
|
|
|
Cost amount carried at Close of Period
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Property
|
|
Location
|
|
Number of Buildings
|
|
Encumbrances
(1)
|
|
Land
|
|
Buildings
and Equipment |
|
|
Impairments/
Writedowns |
|
Land
|
|
Buildings
and Equipment |
|
Total
(2)
|
|
Accumulated
Depreciation (3) |
|
Date(s)
Acquired |
|
Original
Construction Date(s) |
|||||||||||||||||||
|
3250 and 3260 Jay Street
|
|
Santa Clara, CA
|
|
2
|
|
—
|
|
|
20,056
|
|
|
14,163
|
|
|
—
|
|
|
—
|
|
|
20,056
|
|
|
14,163
|
|
|
34,219
|
|
|
—
|
|
|
12/31/2018
|
|
1982
|
|||||||||
|
603 San Juan Avenue
|
|
Stockton, CA
|
|
1
|
|
—
|
|
|
563
|
|
|
5,470
|
|
|
—
|
|
|
—
|
|
|
563
|
|
|
5,470
|
|
|
6,033
|
|
|
(878
|
)
|
|
7/20/2012
|
|
2012
|
|||||||||
|
350 West Java Drive
|
|
Sunnyvale, CA
|
|
1
|
|
—
|
|
|
24,804
|
|
|
464
|
|
|
—
|
|
|
—
|
|
|
24,804
|
|
|
464
|
|
|
25,268
|
|
|
—
|
|
|
12/31/2018
|
|
1984
|
|||||||||
|
7958 South Chester Street
|
|
Centennial, CO
|
|
1
|
|
—
|
|
|
6,735
|
|
|
7,210
|
|
|
—
|
|
|
—
|
|
|
6,735
|
|
|
7,210
|
|
|
13,945
|
|
|
—
|
|
|
12/31/2018
|
|
2000
|
|||||||||
|
350 Spectrum Loop
|
|
Colorado Springs, CO
|
|
1
|
|
—
|
|
|
3,679
|
|
|
7,793
|
|
|
—
|
|
|
—
|
|
|
3,679
|
|
|
7,793
|
|
|
11,472
|
|
|
—
|
|
|
12/31/2018
|
|
2000
|
|||||||||
|
333 Inverness Drive South
|
|
Englewood, CO
|
|
1
|
|
—
|
|
|
5,756
|
|
|
4,579
|
|
|
—
|
|
|
—
|
|
|
5,756
|
|
|
4,579
|
|
|
10,335
|
|
|
—
|
|
|
12/31/2018
|
|
1998
|
|||||||||
|
12795 West Alameda Parkway
|
|
Lakewood, CO
|
|
1
|
|
—
|
|
|
2,640
|
|
|
23,777
|
|
|
1,094
|
|
|
—
|
|
|
2,640
|
|
|
24,871
|
|
|
27,511
|
|
|
(5,559
|
)
|
|
1/15/2010
|
|
1988
|
|||||||||
|
Corporate Center
|
|
Lakewood, CO
|
|
3
|
|
—
|
|
|
2,887
|
|
|
27,537
|
|
|
3,889
|
|
|
—
|
|
|
2,887
|
|
|
31,426
|
|
|
34,313
|
|
|
(12,495
|
)
|
|
10/11/2002
|
|
1980
|
|||||||||
|
1 Targeting Center
|
|
Windsor, CT
|
|
1
|
|
—
|
|
|
1,404
|
|
|
574
|
|
|
—
|
|
|
—
|
|
|
1,404
|
|
|
574
|
|
|
1,978
|
|
|
—
|
|
|
12/31/2018
|
|
1980
|
|||||||||
|
11 Dupont Circle, NW
|
|
Washington, DC
|
|
1
|
|
—
|
|
|
28,255
|
|
|
44,743
|
|
|
1,994
|
|
|
—
|
|
|
28,255
|
|
|
46,737
|
|
|
74,992
|
|
|
(1,672
|
)
|
|
10/2/2017
|
|
1974
|
|||||||||
|
1211 Connecticut Avenue, NW
|
|
Washington, DC
|
|
1
|
|
—
|
|
|
30,388
|
|
|
24,667
|
|
|
1,391
|
|
|
—
|
|
|
30,388
|
|
|
26,058
|
|
|
56,446
|
|
|
(892
|
)
|
|
10/2/2017
|
|
1967
|
|||||||||
|
1401 K Street, NW
|
|
Washington, DC
|
|
1
|
|
—
|
|
|
29,215
|
|
|
34,656
|
|
|
3,210
|
|
|
—
|
|
|
29,215
|
|
|
37,866
|
|
|
67,081
|
|
|
(1,497
|
)
|
|
10/2/2017
|
|
1929
|
|||||||||
|
20 Massachusetts Avenue
|
|
Washington, DC
|
|
1
|
|
—
|
|
|
12,009
|
|
|
51,528
|
|
|
21,395
|
|
|
—
|
|
|
12,228
|
|
|
72,704
|
|
|
84,932
|
|
|
(35,137
|
)
|
|
3/31/1997
|
|
1996
|
|||||||||
|
440 First Street, NW
|
|
Washington, DC
|
|
1
|
|
—
|
|
|
27,903
|
|
|
38,624
|
|
|
1,293
|
|
|
—
|
|
|
27,903
|
|
|
39,917
|
|
|
67,820
|
|
|
(1,264
|
)
|
|
10/2/2017
|
|
1982
|
|||||||||
|
625 Indiana Avenue
|
|
Washington, DC
|
|
1
|
|
—
|
|
|
26,000
|
|
|
25,955
|
|
|
7,293
|
|
|
—
|
|
|
26,000
|
|
|
33,248
|
|
|
59,248
|
|
|
(7,555
|
)
|
|
8/17/2010
|
|
1989
|
|||||||||
|
840 First Street, NE
|
|
Washington, DC
|
|
1
|
|
—
|
|
|
42,727
|
|
|
73,249
|
|
|
472
|
|
|
—
|
|
|
42,727
|
|
|
73,721
|
|
|
116,448
|
|
|
(2,290
|
)
|
|
10/2/2017
|
|
2003
|
|||||||||
|
10350 NW 112th Avenue
|
|
Miami, FL
|
|
1
|
|
—
|
|
|
4,836
|
|
|
2,779
|
|
|
—
|
|
|
—
|
|
|
4,836
|
|
|
2,779
|
|
|
7,615
|
|
|
—
|
|
|
12/31/2018
|
|
2002
|
|||||||||
|
7850 Southwest 6th Court
|
|
Plantation, FL
|
|
1
|
|
—
|
|
|
4,800
|
|
|
30,592
|
|
|
383
|
|
|
—
|
|
|
4,800
|
|
|
30,975
|
|
|
35,775
|
|
|
(6,026
|
)
|
|
5/12/2011
|
|
1999
|
|||||||||
|
8900 Grand Oak Circle
|
|
Tampa, FL
|
|
1
|
|
—
|
|
|
1,100
|
|
|
11,773
|
|
|
288
|
|
|
—
|
|
|
1,100
|
|
|
12,061
|
|
|
13,161
|
|
|
(2,471
|
)
|
|
10/15/2010
|
|
1994
|
|||||||||
|
180 Ted Turner Drive SW
|
|
Atlanta, GA
|
|
1
|
|
—
|
|
|
5,717
|
|
|
20,017
|
|
|
186
|
|
|
—
|
|
|
5,717
|
|
|
20,203
|
|
|
25,920
|
|
|
(3,229
|
)
|
|
7/25/2012
|
|
2007
|
|||||||||
|
Corporate Square
|
|
Atlanta, GA
|
|
5
|
|
—
|
|
|
3,996
|
|
|
29,762
|
|
|
27,816
|
|
|
—
|
|
|
3,996
|
|
|
57,578
|
|
|
61,574
|
|
|
(13,371
|
)
|
|
7/16/2004
|
|
1967
|
|||||||||
|
Executive Park
|
|
Atlanta, GA
|
|
1
|
|
—
|
|
|
1,521
|
|
|
11,826
|
|
|
3,996
|
|
|
—
|
|
|
1,521
|
|
|
15,822
|
|
|
17,343
|
|
|
(5,781
|
)
|
|
7/16/2004
|
|
1972
|
|||||||||
|
One Georgia Center
|
|
Atlanta, GA
|
|
1
|
|
—
|
|
|
10,250
|
|
|
27,933
|
|
|
6,034
|
|
|
—
|
|
|
10,250
|
|
|
33,967
|
|
|
44,217
|
|
|
(5,419
|
)
|
|
9/30/2011
|
|
1968
|
|||||||||
|
One Primerica Parkway
|
|
Duluth, GA
|
|
1
|
|
—
|
|
|
6,982
|
|
|
23,132
|
|
|
—
|
|
|
—
|
|
|
6,982
|
|
|
23,132
|
|
|
30,114
|
|
|
—
|
|
|
12/31/2018
|
|
2013
|
|||||||||
|
4712 Southpark Boulevard
|
|
Ellenwood, GA
|
|
1
|
|
—
|
|
|
1,390
|
|
|
19,635
|
|
|
88
|
|
|
—
|
|
|
1,390
|
|
|
19,723
|
|
|
21,113
|
|
|
(3,156
|
)
|
|
7/25/2012
|
|
2005
|
|||||||||
|
91-209 Kuhela Street
|
|
Kapolei, HI
|
|
1
|
|
—
|
|
|
2,008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,008
|
|
|
—
|
|
|
2,008
|
|
|
—
|
|
|
12/31/2018
|
|
—
|
|||||||||
|
8305 NW 62nd Avenue
|
|
Johnston, IA
|
|
1
|
|
—
|
|
|
2,670
|
|
|
8,060
|
|
|
—
|
|
|
—
|
|
|
2,670
|
|
|
8,060
|
|
|
10,730
|
|
|
—
|
|
|
12/31/2018
|
|
2011
|
|||||||||
|
1185, 1249 & 1387 S. Vinnell Way
|
|
Boise, ID
|
|
3
|
|
—
|
|
|
3,390
|
|
|
29,026
|
|
|
822
|
|
|
—
|
|
|
3,390
|
|
|
29,848
|
|
|
33,238
|
|
|
(4,871
|
)
|
|
9/11/2012
|
|
1996; 1997; 2002
|
|||||||||
|
|
|
|
|
|
|
|
|
Initial Cost to Company
|
|
Costs Capitalized Subsequent to Acquisition
|
|
|
|
Cost amount carried at Close of Period
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Property
|
|
Location
|
|
Number of Buildings
|
|
Encumbrances
(1)
|
|
Land
|
|
Buildings
and Equipment |
|
|
Impairments/
Writedowns |
|
Land
|
|
Buildings
and Equipment |
|
Total
(2)
|
|
Accumulated
Depreciation (3) |
|
Date(s)
Acquired |
|
Original
Construction Date(s) |
|||||||||||||||||||
|
2020 S. Arlington Heights
|
|
Arlington Heights, IL
|
|
1
|
|
—
|
|
|
1,450
|
|
|
13,160
|
|
|
872
|
|
|
—
|
|
|
1,450
|
|
|
14,032
|
|
|
15,482
|
|
|
(3,101
|
)
|
|
12/29/2009
|
|
1988
|
|||||||||
|
400 South Jefferson Street
|
|
Chicago, IL
|
|
1
|
|
13,384
|
|
|
19,532
|
|
|
20,274
|
|
|
—
|
|
|
—
|
|
|
19,532
|
|
|
20,274
|
|
|
39,806
|
|
|
—
|
|
|
12/31/2018
|
|
1947
|
|||||||||
|
475 Bond Street
|
|
Lincolnshire, IL
|
|
1
|
|
—
|
|
|
4,915
|
|
|
574
|
|
|
—
|
|
|
—
|
|
|
4,915
|
|
|
574
|
|
|
5,489
|
|
|
—
|
|
|
12/31/2018
|
|
2000
|
|||||||||
|
1415 West Diehl Road
|
|
Naperville, IL
|
|
1
|
|
—
|
|
|
12,431
|
|
|
20,749
|
|
|
—
|
|
|
—
|
|
|
12,431
|
|
|
20,749
|
|
|
33,180
|
|
|
—
|
|
|
12/31/2018
|
|
2001
|
|||||||||
|
440 North Fairway Drive
|
|
Vernon Hills, IL
|
|
1
|
|
—
|
|
|
4,500
|
|
|
445
|
|
|
—
|
|
|
—
|
|
|
4,500
|
|
|
445
|
|
|
4,945
|
|
|
—
|
|
|
12/31/2018
|
|
1992
|
|||||||||
|
Intech Park
|
|
Indianapolis, IN
|
|
3
|
|
—
|
|
|
4,170
|
|
|
68,888
|
|
|
4,337
|
|
|
—
|
|
|
4,170
|
|
|
73,225
|
|
|
77,395
|
|
|
(13,425
|
)
|
|
10/14/2011
|
|
2000; 2001; 2008
|
|||||||||
|
7601 and 7635 Interactive Way
|
|
Indianapolis, IN
|
|
2
|
|
—
|
|
|
3,363
|
|
|
14,636
|
|
|
—
|
|
|
—
|
|
|
3,363
|
|
|
14,636
|
|
|
17,999
|
|
|
—
|
|
|
12/31/2018
|
|
2003; 2008
|
|||||||||
|
400 State Street
|
|
Kansas City, KS
|
|
1
|
|
49,087
|
|
|
640
|
|
|
9,932
|
|
|
5,265
|
|
|
—
|
|
|
640
|
|
|
15,197
|
|
|
15,837
|
|
|
(3,309
|
)
|
|
6/16/2010
|
|
1971
|
|||||||||
|
Capitol Tower
|
|
Topeka, KS
|
|
1
|
|
—
|
|
|
1,236
|
|
|
3,115
|
|
|
—
|
|
|
—
|
|
|
1,236
|
|
|
3,115
|
|
|
4,351
|
|
|
—
|
|
|
12/31/2018
|
|
1983
|
|||||||||
|
The Atrium at Circleport II
|
|
Erlanger, KY
|
|
1
|
|
—
|
|
|
1,810
|
|
|
1,948
|
|
|
—
|
|
|
—
|
|
|
1,810
|
|
|
1,948
|
|
|
3,758
|
|
|
—
|
|
|
12/31/2018
|
|
1999
|
|||||||||
|
7125 Industrial Road
|
|
Florence, KY
|
|
1
|
|
—
|
|
|
1,698
|
|
|
11,722
|
|
|
151
|
|
|
—
|
|
|
1,698
|
|
|
11,873
|
|
|
13,571
|
|
|
(1,766
|
)
|
|
12/31/2012
|
|
1980
|
|||||||||
|
251 Causeway Street
|
|
Boston, MA
|
|
1
|
|
—
|
|
|
5,100
|
|
|
17,293
|
|
|
2,555
|
|
|
—
|
|
|
5,100
|
|
|
19,848
|
|
|
24,948
|
|
|
(4,061
|
)
|
|
8/17/2010
|
|
1987
|
|||||||||
|
300 and 330 Billerica Road
|
|
Chelmsford, MA
|
|
2
|
|
—
|
|
|
4,737
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,737
|
|
|
—
|
|
|
4,737
|
|
|
—
|
|
|
12/31/2018
|
|
1984
|
|||||||||
|
75 Pleasant Street
|
|
Malden, MA
|
|
1
|
|
—
|
|
|
1,050
|
|
|
31,086
|
|
|
271
|
|
|
—
|
|
|
1,050
|
|
|
31,357
|
|
|
32,407
|
|
|
(6,703
|
)
|
|
5/24/2010
|
|
2008
|
|||||||||
|
111 Powdermill Road
|
|
Maynard, MA
|
|
1
|
|
—
|
|
|
4,432
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,432
|
|
|
—
|
|
|
4,432
|
|
|
—
|
|
|
12/31/2018
|
|
1990
|
|||||||||
|
25 Newport Avenue
|
|
Quincy, MA
|
|
1
|
|
—
|
|
|
2,700
|
|
|
9,199
|
|
|
1,791
|
|
|
—
|
|
|
2,700
|
|
|
10,990
|
|
|
13,690
|
|
|
(2,021
|
)
|
|
2/16/2011
|
|
1985
|
|||||||||
|
One Montvale Avenue
|
|
Stoneham, MA
|
|
1
|
|
—
|
|
|
1,670
|
|
|
11,035
|
|
|
2,234
|
|
|
—
|
|
|
1,670
|
|
|
13,269
|
|
|
14,939
|
|
|
(2,693
|
)
|
|
6/16/2010
|
|
1945
|
|||||||||
|
314 Littleton Road
|
|
Westford, MA
|
|
1
|
|
—
|
|
|
5,736
|
|
|
8,555
|
|
|
—
|
|
|
—
|
|
|
5,736
|
|
|
8,555
|
|
|
14,291
|
|
|
—
|
|
|
12/31/2018
|
|
2007
|
|||||||||
|
Annapolis Commerce Center
|
|
Annapolis, MD
|
|
2
|
|
—
|
|
|
4,057
|
|
|
7,665
|
|
|
219
|
|
|
—
|
|
|
4,057
|
|
|
7,884
|
|
|
11,941
|
|
|
(275
|
)
|
|
10/2/2017
|
|
1989
|
|||||||||
|
4201 Patterson Avenue
|
|
Baltimore, MD
|
|
1
|
|
—
|
|
|
901
|
|
|
8,097
|
|
|
4,085
|
|
|
—
|
|
|
901
|
|
|
12,182
|
|
|
13,083
|
|
|
(4,961
|
)
|
|
10/15/1998
|
|
1989
|
|||||||||
|
Hillside Center
|
|
Columbia, MD
|
|
2
|
|
—
|
|
|
3,437
|
|
|
4,228
|
|
|
336
|
|
|
—
|
|
|
3,437
|
|
|
4,564
|
|
|
8,001
|
|
|
(131
|
)
|
|
10/2/2017
|
|
2001
|
|||||||||
|
TenThreeTwenty
|
|
Columbia, MD
|
|
1
|
|
—
|
|
|
3,126
|
|
|
16,361
|
|
|
869
|
|
|
—
|
|
|
3,126
|
|
|
17,230
|
|
|
20,356
|
|
|
(570
|
)
|
|
10/2/2017
|
|
1982
|
|||||||||
|
7001 Columbia Gateway Drive
|
|
Columbia, MD
|
|
1
|
|
—
|
|
|
5,687
|
|
|
10,433
|
|
|
—
|
|
|
—
|
|
|
5,687
|
|
|
10,433
|
|
|
16,120
|
|
|
—
|
|
|
12/31/2018
|
|
2008
|
|||||||||
|
3300 75th Avenue
|
|
Landover, MD
|
|
1
|
|
—
|
|
|
4,110
|
|
|
36,371
|
|
|
1,346
|
|
|
—
|
|
|
4,110
|
|
|
37,717
|
|
|
41,827
|
|
|
(8,281
|
)
|
|
2/26/2010
|
|
1985
|
|||||||||
|
1401 Rockville Pike
|
|
Rockville, MD
|
|
1
|
|
25,019
|
|
|
3,248
|
|
|
29,258
|
|
|
16,481
|
|
|
—
|
|
|
3,248
|
|
|
45,739
|
|
|
48,987
|
|
|
(19,266
|
)
|
|
2/2/1998
|
|
1986
|
|||||||||
|
2115 East Jefferson Street
|
|
Rockville, MD
|
|
1
|
|
—
|
|
|
3,349
|
|
|
11,152
|
|
|
385
|
|
|
—
|
|
|
3,349
|
|
|
11,537
|
|
|
14,886
|
|
|
(1,521
|
)
|
|
8/27/2013
|
|
1981
|
|||||||||
|
Redland 520/530
|
|
Rockville, MD
|
|
3
|
|
—
|
|
|
12,714
|
|
|
61,377
|
|
|
1,498
|
|
|
—
|
|
|
12,714
|
|
|
62,875
|
|
|
75,589
|
|
|
(1,945
|
)
|
|
10/2/2017
|
|
2008
|
|||||||||
|
Redland 540
|
|
Rockville, MD
|
|
1
|
|
—
|
|
|
10,740
|
|
|
17,714
|
|
|
2,896
|
|
|
—
|
|
|
10,740
|
|
|
20,610
|
|
|
31,350
|
|
|
(879
|
)
|
|
10/2/2017
|
|
2003
|
|||||||||
|
|
|
|
|
|
|
|
|
Initial Cost to Company
|
|
Costs Capitalized Subsequent to Acquisition
|
|
|
|
Cost amount carried at Close of Period
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Property
|
|
Location
|
|
Number of Buildings
|
|
Encumbrances
(1)
|
|
Land
|
|
Buildings
and Equipment |
|
|
Impairments/
Writedowns |
|
Land
|
|
Buildings
and Equipment |
|
Total
(2)
|
|
Accumulated
Depreciation (3) |
|
Date(s)
Acquired |
|
Original
Construction Date(s) |
|||||||||||||||||||
|
Rutherford Business Park
|
|
Windsor Mill, MD
|
|
1
|
|
—
|
|
|
1,598
|
|
|
10,219
|
|
|
330
|
|
|
—
|
|
|
1,598
|
|
|
10,549
|
|
|
12,147
|
|
|
(1,557
|
)
|
|
11/16/2012
|
|
1972
|
|||||||||
|
Meadows Business Park
|
|
Woodlawn, MD
|
|
2
|
|
—
|
|
|
3,735
|
|
|
21,509
|
|
|
2,268
|
|
|
—
|
|
|
3,735
|
|
|
23,777
|
|
|
27,512
|
|
|
(4,701
|
)
|
|
2/15/2011
|
|
1973
|
|||||||||
|
3550 Green Court
|
|
Ann Arbor, MI
|
|
1
|
|
69,304
|
|
|
3,659
|
|
|
4,896
|
|
|
—
|
|
|
—
|
|
|
3,659
|
|
|
4,896
|
|
|
8,555
|
|
|
—
|
|
|
12/31/2018
|
|
1998
|
|||||||||
|
11411 E. Jefferson Avenue
|
|
Detroit, MI
|
|
1
|
|
—
|
|
|
630
|
|
|
18,002
|
|
|
438
|
|
|
—
|
|
|
630
|
|
|
18,440
|
|
|
19,070
|
|
|
(3,930
|
)
|
|
4/23/2010
|
|
2009
|
|||||||||
|
Rosedale Corporate Plaza
|
|
Roseville, MN
|
|
1
|
|
—
|
|
|
672
|
|
|
6,045
|
|
|
1,505
|
|
|
—
|
|
|
672
|
|
|
7,550
|
|
|
8,222
|
|
|
(3,474
|
)
|
|
12/1/1999
|
|
1987
|
|||||||||
|
1300 Summit Street
|
|
Kansas City, MO
|
|
1
|
|
2,933
|
|
|
2,776
|
|
|
12,070
|
|
|
915
|
|
|
—
|
|
|
2,776
|
|
|
12,985
|
|
|
15,761
|
|
|
(1,939
|
)
|
|
9/27/2012
|
|
1998
|
|||||||||
|
4241-4300 NE 34th Street
|
|
Kansas City, MO
|
|
1
|
|
—
|
|
|
1,443
|
|
|
6,193
|
|
|
3,992
|
|
|
—
|
|
|
1,780
|
|
|
9,848
|
|
|
11,628
|
|
|
(4,199
|
)
|
|
3/31/1997
|
|
1995
|
|||||||||
|
2555 Grand Boulevard
|
|
Kansas City, MO
|
|
1
|
|
—
|
|
|
4,243
|
|
|
51,931
|
|
|
—
|
|
|
—
|
|
|
4,243
|
|
|
51,931
|
|
|
56,174
|
|
|
—
|
|
|
12/31/2018
|
|
2003
|
|||||||||
|
1220 Echelon Parkway
|
|
Jackson, MS
|
|
1
|
|
—
|
|
|
440
|
|
|
25,458
|
|
|
238
|
|
|
—
|
|
|
440
|
|
|
25,696
|
|
|
26,136
|
|
|
(4,100
|
)
|
|
7/25/2012
|
|
2009
|
|||||||||
|
2300 and 2400 Yorkmont Road
|
|
Charlotte, NC
|
|
2
|
|
—
|
|
|
1,345
|
|
|
19,226
|
|
|
—
|
|
|
—
|
|
|
1,345
|
|
|
19,226
|
|
|
20,571
|
|
|
—
|
|
|
12/31/2018
|
|
1995
|
|||||||||
|
18010 and 18020 Burt Street
|
|
Omaha, NE
|
|
2
|
|
—
|
|
|
7,032
|
|
|
12,599
|
|
|
—
|
|
|
—
|
|
|
7,032
|
|
|
12,599
|
|
|
19,631
|
|
|
—
|
|
|
12/31/2018
|
|
2012
|
|||||||||
|
10-12 Celina Avenue
|
|
Nashua, NH
|
|
1
|
|
—
|
|
|
3,000
|
|
|
14,052
|
|
|
1,569
|
|
|
—
|
|
|
3,000
|
|
|
15,621
|
|
|
18,621
|
|
|
(3,379
|
)
|
|
8/31/2009
|
|
1979
|
|||||||||
|
500 Charles Ewing Boulevard
|
|
Ewing, NJ
|
|
1
|
|
—
|
|
|
4,846
|
|
|
26,208
|
|
|
—
|
|
|
—
|
|
|
4,846
|
|
|
26,208
|
|
|
31,054
|
|
|
—
|
|
|
12/31/2018
|
|
2012
|
|||||||||
|
299 Jefferson Road
|
|
Parsippany, NJ
|
|
1
|
|
—
|
|
|
4,579
|
|
|
2,937
|
|
|
—
|
|
|
—
|
|
|
4,579
|
|
|
2,937
|
|
|
7,516
|
|
|
—
|
|
|
12/31/2018
|
|
2011
|
|||||||||
|
One Jefferson Road
|
|
Parsippany, NJ
|
|
1
|
|
—
|
|
|
4,450
|
|
|
5,291
|
|
|
—
|
|
|
—
|
|
|
4,450
|
|
|
5,291
|
|
|
9,741
|
|
|
—
|
|
|
12/31/2018
|
|
2009
|
|||||||||
|
50 West State Street
|
|
Trenton, NJ
|
|
1
|
|
—
|
|
|
5,000
|
|
|
38,203
|
|
|
3,313
|
|
|
—
|
|
|
5,000
|
|
|
41,516
|
|
|
46,516
|
|
|
(8,009
|
)
|
|
12/30/2010
|
|
1989
|
|||||||||
|
138 Delaware Avenue
|
|
Buffalo, NY
|
|
1
|
|
—
|
|
|
4,405
|
|
|
18,899
|
|
|
7,551
|
|
|
—
|
|
|
4,485
|
|
|
26,370
|
|
|
30,855
|
|
|
(11,830
|
)
|
|
3/31/1997
|
|
1994
|
|||||||||
|
Airline Corporate Center
|
|
Colonie, NY
|
|
1
|
|
—
|
|
|
790
|
|
|
6,400
|
|
|
406
|
|
|
—
|
|
|
790
|
|
|
6,806
|
|
|
7,596
|
|
|
(1,053
|
)
|
|
6/22/2012
|
|
2004
|
|||||||||
|
5000 Corporate Court
|
|
Holtsville, NY
|
|
1
|
|
—
|
|
|
6,530
|
|
|
17,711
|
|
|
2,734
|
|
|
—
|
|
|
6,530
|
|
|
20,445
|
|
|
26,975
|
|
|
(3,811
|
)
|
|
8/31/2011
|
|
2000
|
|||||||||
|
8687 Carling Road
|
|
Liverpool, NY
|
|
1
|
|
—
|
|
|
571
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
571
|
|
|
—
|
|
|
571
|
|
|
—
|
|
|
12/31/2018
|
|
1997
|
|||||||||
|
1212 Pittsford - Victor Road
|
|
Pittsford, NY
|
|
1
|
|
27,238
|
|
|
613
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|
613
|
|
|
79
|
|
|
692
|
|
|
—
|
|
|
12/31/2018
|
|
1965
|
|||||||||
|
500 Canal View Boulevard
|
|
Rochester, NY
|
|
1
|
|
—
|
|
|
2,077
|
|
|
376
|
|
|
—
|
|
|
—
|
|
|
2,077
|
|
|
376
|
|
|
2,453
|
|
|
—
|
|
|
12/31/2018
|
|
1996
|
|||||||||
|
2231 Schrock Road
|
|
Columbus, OH
|
|
1
|
|
—
|
|
|
722
|
|
|
218
|
|
|
—
|
|
|
—
|
|
|
722
|
|
|
218
|
|
|
940
|
|
|
—
|
|
|
12/31/2018
|
|
1999
|
|||||||||
|
4600 25th Avenue
|
|
Salem, OR
|
|
1
|
|
—
|
|
|
6,510
|
|
|
17,973
|
|
|
5,165
|
|
|
—
|
|
|
6,510
|
|
|
23,138
|
|
|
29,648
|
|
|
(4,898
|
)
|
|
12/20/2011
|
|
1957
|
|||||||||
|
501 Ridge Avenue
|
|
Hanover, PA
|
|
1
|
|
—
|
|
|
3,452
|
|
|
5,152
|
|
|
—
|
|
|
—
|
|
|
3,452
|
|
|
5,152
|
|
|
8,604
|
|
|
—
|
|
|
12/31/2018
|
|
1948
|
|||||||||
|
8800 Tinicum Boulevard
|
|
Philadelphia, PA
|
|
1
|
|
—
|
|
|
5,617
|
|
|
22,866
|
|
|
—
|
|
|
—
|
|
|
5,617
|
|
|
22,866
|
|
|
28,483
|
|
|
—
|
|
|
12/31/2018
|
|
2000
|
|||||||||
|
Synergy Business Park
|
|
Columbia, SC
|
|
3
|
|
—
|
|
|
1,439
|
|
|
11,143
|
|
|
5,178
|
|
|
—
|
|
|
1,439
|
|
|
16,321
|
|
|
17,760
|
|
|
(4,335
|
)
|
|
5/10/2006;9/17/2010
|
|
1982; 1985
|
|||||||||
|
9680 Old Bailes Road
|
|
Fort Mill, SC
|
|
1
|
|
—
|
|
|
841
|
|
|
2,967
|
|
|
—
|
|
|
—
|
|
|
841
|
|
|
2,967
|
|
|
3,808
|
|
|
—
|
|
|
12/31/2018
|
|
2007
|
|||||||||
|
One Memphis Place
|
|
Memphis, TN
|
|
1
|
|
—
|
|
|
1,630
|
|
|
5,645
|
|
|
3,290
|
|
|
—
|
|
|
1,630
|
|
|
8,935
|
|
|
10,565
|
|
|
(1,742
|
)
|
|
9/17/2010
|
|
1985
|
|||||||||
|
16001 North Dallas Parkway
|
|
Addison, TX
|
|
2
|
|
—
|
|
|
10,364
|
|
|
63,661
|
|
|
—
|
|
|
—
|
|
|
10,364
|
|
|
63,661
|
|
|
74,025
|
|
|
—
|
|
|
12/31/2018
|
|
1987
|
|||||||||
|
|
|
|
|
|
|
|
|
Initial Cost to Company
|
|
Costs Capitalized Subsequent to Acquisition
|
|
|
|
Cost amount carried at Close of Period
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Property
|
|
Location
|
|
Number of Buildings
|
|
Encumbrances
(1)
|
|
Land
|
|
Buildings
and Equipment |
|
|
Impairments/
Writedowns |
|
Land
|
|
Buildings
and Equipment |
|
Total
(2)
|
|
Accumulated
Depreciation (3) |
|
Date(s)
Acquired |
|
Original
Construction Date(s) |
|||||||||||||||||||
|
2115-2116 East Randol Mill Road
|
|
Arlington, TX
|
|
1
|
|
—
|
|
|
2,146
|
|
|
5,469
|
|
|
—
|
|
|
—
|
|
|
2,146
|
|
|
5,469
|
|
|
7,615
|
|
|
—
|
|
|
12/31/2018
|
|
1989
|
|||||||||
|
Research Park
|
|
Austin, TX
|
|
2
|
|
—
|
|
|
4,292
|
|
|
13,856
|
|
|
—
|
|
|
—
|
|
|
4,292
|
|
|
13,856
|
|
|
18,148
|
|
|
—
|
|
|
12/31/2018
|
|
1999
|
|||||||||
|
1001 Noble Energy Way
|
|
Houston, TX
|
|
1
|
|
—
|
|
|
5,222
|
|
|
29,392
|
|
|
—
|
|
|
—
|
|
|
5,222
|
|
|
29,392
|
|
|
34,614
|
|
|
—
|
|
|
12/31/2018
|
|
1998
|
|||||||||
|
10451 Clay Road
|
|
Houston, TX
|
|
1
|
|
—
|
|
|
5,538
|
|
|
10,335
|
|
|
—
|
|
|
—
|
|
|
5,538
|
|
|
10,335
|
|
|
15,873
|
|
|
—
|
|
|
12/31/2018
|
|
2013
|
|||||||||
|
202 North Castlegory Road
|
|
Houston, TX
|
|
1
|
|
—
|
|
|
870
|
|
|
5,064
|
|
|
—
|
|
|
—
|
|
|
870
|
|
|
5,064
|
|
|
5,934
|
|
|
—
|
|
|
12/31/2018
|
|
2016
|
|||||||||
|
6380 Rogerdale Road
|
|
Houston, TX
|
|
1
|
|
—
|
|
|
12,728
|
|
|
6,161
|
|
|
—
|
|
|
—
|
|
|
12,728
|
|
|
6,161
|
|
|
18,889
|
|
|
—
|
|
|
12/31/2018
|
|
2006
|
|||||||||
|
4221 W. John Carpenter Freeway
|
|
Irving, TX
|
|
1
|
|
—
|
|
|
1,424
|
|
|
2,384
|
|
|
—
|
|
|
—
|
|
|
1,424
|
|
|
2,384
|
|
|
3,808
|
|
|
—
|
|
|
12/31/2018
|
|
1995
|
|||||||||
|
8675,8701-8711 Freeport Pkwy and 8901 Esters Boulevard
|
|
Irving, TX
|
|
3
|
|
—
|
|
|
10,266
|
|
|
31,815
|
|
|
—
|
|
|
—
|
|
|
10,266
|
|
|
31,815
|
|
|
42,081
|
|
|
—
|
|
|
12/31/2018
|
|
1990
|
|||||||||
|
1511 East Common Street
|
|
New Braunfels, TX
|
|
1
|
|
—
|
|
|
5,004
|
|
|
1,276
|
|
|
—
|
|
|
—
|
|
|
5,004
|
|
|
1,276
|
|
|
6,280
|
|
|
—
|
|
|
12/31/2018
|
|
2005
|
|||||||||
|
2900 West Plano Parkway
|
|
Plano, TX
|
|
1
|
|
—
|
|
|
6,873
|
|
|
8,901
|
|
|
—
|
|
|
—
|
|
|
6,873
|
|
|
8,901
|
|
|
15,774
|
|
|
—
|
|
|
12/31/2018
|
|
1998
|
|||||||||
|
3400 West Plano Parkway
|
|
Plano, TX
|
|
1
|
|
—
|
|
|
4,579
|
|
|
16,091
|
|
|
—
|
|
|
—
|
|
|
4,579
|
|
|
16,091
|
|
|
20,670
|
|
|
—
|
|
|
12/31/2018
|
|
1994
|
|||||||||
|
19100 Ridgewood Parkway
|
|
San Antonio, TX
|
|
1
|
|
—
|
|
|
4,223
|
|
|
144,519
|
|
|
—
|
|
|
—
|
|
|
4,223
|
|
|
144,519
|
|
|
148,742
|
|
|
—
|
|
|
12/31/2018
|
|
2008
|
|||||||||
|
3600 Wiseman Boulevard
|
|
San Antonio, TX
|
|
1
|
|
—
|
|
|
3,521
|
|
|
6,715
|
|
|
—
|
|
|
—
|
|
|
3,521
|
|
|
6,715
|
|
|
10,236
|
|
|
—
|
|
|
12/31/2018
|
|
2004
|
|||||||||
|
701 Clay Road
|
|
Waco, TX
|
|
1
|
|
—
|
|
|
2,030
|
|
|
8,708
|
|
|
3,584
|
|
|
—
|
|
|
2,060
|
|
|
12,262
|
|
|
14,322
|
|
|
(5,020
|
)
|
|
12/23/1997
|
|
1997
|
|||||||||
|
1800 Novell Place
|
|
Provo, UT
|
|
1
|
|
—
|
|
|
7,546
|
|
|
43,831
|
|
|
—
|
|
|
—
|
|
|
7,546
|
|
|
43,831
|
|
|
51,377
|
|
|
—
|
|
|
12/31/2018
|
|
2000
|
|||||||||
|
4885-4931 North 300 West
|
|
Provo, UT
|
|
2
|
|
—
|
|
|
3,946
|
|
|
9,504
|
|
|
—
|
|
|
—
|
|
|
3,946
|
|
|
9,504
|
|
|
13,450
|
|
|
—
|
|
|
12/31/2018
|
|
2009
|
|||||||||
|
14660, 14672 & 14668 Lee Road
|
|
Chantilly, VA
|
|
3
|
|
—
|
|
|
6,966
|
|
|
74,214
|
|
|
2,038
|
|
|
—
|
|
|
6,966
|
|
|
76,252
|
|
|
83,218
|
|
|
(3,757
|
)
|
|
12/22/2016
|
|
1998; 2002; 2006
|
|||||||||
|
1434 Crossways
|
|
Chesapeake, VA
|
|
2
|
|
—
|
|
|
3,617
|
|
|
19,527
|
|
|
1,817
|
|
|
—
|
|
|
3,617
|
|
|
21,344
|
|
|
24,961
|
|
|
(840
|
)
|
|
10/2/2017
|
|
1998
|
|||||||||
|
Greenbrier Towers
|
|
Chesapeake, VA
|
|
2
|
|
—
|
|
|
3,437
|
|
|
11,241
|
|
|
700
|
|
|
—
|
|
|
3,437
|
|
|
11,941
|
|
|
15,378
|
|
|
(507
|
)
|
|
10/2/2017
|
|
1985
|
|||||||||
|
Enterchange at Meadowville
|
|
Chester, VA
|
|
1
|
|
—
|
|
|
1,478
|
|
|
9,594
|
|
|
283
|
|
|
—
|
|
|
1,478
|
|
|
9,877
|
|
|
11,355
|
|
|
(1,309
|
)
|
|
8/28/2013
|
|
1999
|
|||||||||
|
Three Flint Hill
|
|
Fairfax, VA
|
|
1
|
|
—
|
|
|
5,991
|
|
|
25,619
|
|
|
1,515
|
|
|
—
|
|
|
5,991
|
|
|
27,134
|
|
|
33,125
|
|
|
(1,075
|
)
|
|
10/2/2017
|
|
1984
|
|||||||||
|
3920 Pender Drive
|
|
Fairfax, VA
|
|
1
|
|
—
|
|
|
2,963
|
|
|
12,840
|
|
|
231
|
|
|
—
|
|
|
2,963
|
|
|
13,071
|
|
|
16,034
|
|
|
(1,529
|
)
|
|
3/21/2014
|
|
1981
|
|||||||||
|
Pender Business Park
|
|
Fairfax, VA
|
|
4
|
|
—
|
|
|
2,529
|
|
|
21,386
|
|
|
636
|
|
|
—
|
|
|
2,529
|
|
|
22,022
|
|
|
24,551
|
|
|
(2,873
|
)
|
|
11/4/2013
|
|
2000
|
|||||||||
|
7987 Ashton Avenue
|
|
Manassas, VA
|
|
1
|
|
—
|
|
|
1,562
|
|
|
8,253
|
|
|
623
|
|
|
—
|
|
|
1,562
|
|
|
8,876
|
|
|
10,438
|
|
|
(439
|
)
|
|
1/3/2017
|
|
1989
|
|||||||||
|
Two Commercial Place
|
|
Norfolk, VA
|
|
1
|
|
—
|
|
|
4,530
|
|
|
21,678
|
|
|
—
|
|
|
—
|
|
|
4,530
|
|
|
21,678
|
|
|
26,208
|
|
|
—
|
|
|
12/31/2018
|
|
1974
|
|||||||||
|
1759 & 1760 Business Center Drive
|
|
Reston, VA
|
|
2
|
|
—
|
|
|
9,066
|
|
|
78,658
|
|
|
2,723
|
|
|
—
|
|
|
9,066
|
|
|
81,381
|
|
|
90,447
|
|
|
(9,273
|
)
|
|
5/28/2014
|
|
1987
|
|||||||||
|
1775 Wiehle Avenue
|
|
Reston, VA
|
|
1
|
|
—
|
|
|
4,138
|
|
|
26,120
|
|
|
756
|
|
|
—
|
|
|
4,138
|
|
|
26,876
|
|
|
31,014
|
|
|
(828
|
)
|
|
10/2/2017
|
|
2001
|
|||||||||
|
9960 Mayland Drive
|
|
Richmond, VA
|
|
1
|
|
—
|
|
|
2,614
|
|
|
15,930
|
|
|
1,891
|
|
|
—
|
|
|
2,614
|
|
|
17,821
|
|
|
20,435
|
|
|
(2,055
|
)
|
|
5/20/2014
|
|
1994
|
|||||||||
|
501 South 5th Street
|
|
Richmond, VA
|
|
1
|
|
—
|
|
|
14,884
|
|
|
39,411
|
|
|
—
|
|
|
—
|
|
|
14,884
|
|
|
39,411
|
|
|
54,295
|
|
|
—
|
|
|
12/31/2018
|
|
2009
|
|||||||||
|
9201 Forest Hill Avenue
|
|
Richmond, VA
|
|
1
|
|
—
|
|
|
1,355
|
|
|
376
|
|
|
—
|
|
|
—
|
|
|
1,355
|
|
|
376
|
|
|
1,731
|
|
|
—
|
|
|
12/31/2018
|
|
1985
|
|||||||||
|
|
|
|
|
|
|
|
|
Initial Cost to Company
|
|
Costs Capitalized Subsequent to Acquisition
|
|
|
|
Cost amount carried at Close of Period
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Property
|
|
Location
|
|
Number of Buildings
|
|
Encumbrances
(1)
|
|
Land
|
|
Buildings
and Equipment |
|
|
Impairments/
Writedowns |
|
Land
|
|
Buildings
and Equipment |
|
Total
(2)
|
|
Accumulated
Depreciation (3) |
|
Date(s)
Acquired |
|
Original
Construction Date(s) |
|||||||||||||||||||
|
Parham Place
|
|
Richmond, VA
|
|
3
|
|
—
|
|
|
920
|
|
|
1,107
|
|
|
—
|
|
|
—
|
|
|
920
|
|
|
1,107
|
|
|
2,027
|
|
|
—
|
|
|
12/31/2018
|
|
1989; 2012
|
|||||||||
|
1751 Blue Hills Drive
|
|
Roanoke, VA
|
|
1
|
|
—
|
|
|
2,710
|
|
|
7,823
|
|
|
—
|
|
|
—
|
|
|
2,710
|
|
|
7,823
|
|
|
10,533
|
|
|
—
|
|
|
12/31/2018
|
|
2003
|
|||||||||
|
Aquia Commerce Center
|
|
Stafford, VA
|
|
2
|
|
—
|
|
|
2,090
|
|
|
7,465
|
|
|
768
|
|
|
—
|
|
|
2,090
|
|
|
8,233
|
|
|
10,323
|
|
|
(1,549
|
)
|
|
6/22/2011
|
|
1988; 1999
|
|||||||||
|
Atlantic Corporate Park
|
|
Sterling, VA
|
|
2
|
|
—
|
|
|
5,752
|
|
|
29,323
|
|
|
178
|
|
|
—
|
|
|
5,752
|
|
|
29,501
|
|
|
35,253
|
|
|
(931
|
)
|
|
10/2/2017
|
|
2008
|
|||||||||
|
Sterling Business Park Lots 8 and 9
|
|
Sterling, VA
|
|
1
|
|
—
|
|
|
9,177
|
|
|
44,375
|
|
|
—
|
|
|
—
|
|
|
9,177
|
|
|
44,375
|
|
|
53,552
|
|
|
(1,385
|
)
|
|
10/2/2017
|
|
2016
|
|||||||||
|
Orbital Sciences Campus
|
|
Sterling, VA
|
|
3
|
|
—
|
|
|
12,372
|
|
|
19,473
|
|
|
—
|
|
|
—
|
|
|
12,372
|
|
|
19,473
|
|
|
31,845
|
|
|
—
|
|
|
12/31/2018
|
|
2000; 2001
|
|||||||||
|
65 Bowdoin Street
|
|
S. Burlington, VT
|
|
1
|
|
—
|
|
|
700
|
|
|
8,416
|
|
|
140
|
|
|
—
|
|
|
700
|
|
|
8,556
|
|
|
9,256
|
|
|
(1,873
|
)
|
|
4/9/2010
|
|
2009
|
|||||||||
|
840 North Broadway
|
|
Everett, WA
|
|
2
|
|
34,704
|
|
|
3,360
|
|
|
15,376
|
|
|
2,116
|
|
|
—
|
|
|
3,360
|
|
|
17,492
|
|
|
20,852
|
|
|
(3,099
|
)
|
|
6/28/2012
|
|
1985
|
|||||||||
|
Stevens Center
|
|
Richland, WA
|
|
2
|
|
—
|
|
|
3,970
|
|
|
17,035
|
|
|
4,137
|
|
|
—
|
|
|
4,045
|
|
|
21,097
|
|
|
25,142
|
|
|
(9,854
|
)
|
|
3/31/1997
|
|
1995
|
|||||||||
|
351, 401, 501 Elliott Ave West
|
|
Seattle, WA
|
|
3
|
|
—
|
|
|
26,851
|
|
|
53,157
|
|
|
—
|
|
|
—
|
|
|
26,851
|
|
|
53,157
|
|
|
80,008
|
|
|
—
|
|
|
12/31/2018
|
|
2000
|
|||||||||
|
11050 West Liberty Drive
|
|
Milwaukee, WI
|
|
1
|
|
—
|
|
|
945
|
|
|
4,539
|
|
|
103
|
|
|
—
|
|
|
945
|
|
|
4,642
|
|
|
5,587
|
|
|
(881
|
)
|
|
6/9/2011
|
|
2006
|
|||||||||
|
882 TJ Jackson Drive
|
|
Falling Waters, WV
|
|
1
|
|
41,099
|
|
|
906
|
|
|
3,886
|
|
|
270
|
|
|
—
|
|
|
922
|
|
|
4,140
|
|
|
5,062
|
|
|
(2,215
|
)
|
|
3/31/1997
|
|
1993
|
|||||||||
|
5353 Yellowstone Road
|
|
Cheyenne, WY
|
|
1
|
|
—
|
|
|
1,915
|
|
|
8,217
|
|
|
765
|
|
|
—
|
|
|
1,950
|
|
|
8,947
|
|
|
10,897
|
|
|
(4,658
|
)
|
|
3/31/1997
|
|
1995
|
|||||||||
|
|
|
|
|
211
|
|
$
|
335,241
|
|
|
$
|
923,390
|
|
|
$
|
2,804,289
|
|
|
$
|
221,397
|
|
|
$
|
(4,440
|
)
|
|
$
|
924,164
|
|
|
$
|
3,020,472
|
|
|
$
|
3,944,636
|
|
|
$
|
(375,147
|
)
|
|
|
|
|
|
Properties Held for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
||||||||||||||
|
500 First Street, NW
|
|
Washington, DC
|
|
1
|
|
—
|
|
|
30,478
|
|
|
15,660
|
|
|
44
|
|
|
—
|
|
|
30,478
|
|
|
15,704
|
|
|
46,182
|
|
|
(448
|
)
|
|
10/2/2017
|
|
1969
|
|||||||||
|
91-008 Hanua Street
|
|
Kapolei, HI
|
|
1
|
|
—
|
|
|
6,846
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,846
|
|
|
—
|
|
|
6,846
|
|
|
—
|
|
|
12/31/2018
|
|
—
|
|||||||||
|
Ammendale Commerce Center
|
|
Beltsville, MD
|
|
3
|
|
—
|
|
|
4,879
|
|
|
9,498
|
|
|
99
|
|
|
—
|
|
|
4,879
|
|
|
9,597
|
|
|
14,476
|
|
|
(279
|
)
|
|
10/2/2017
|
|
1987
|
|||||||||
|
Indian Creek Technology Park
|
|
Beltsville, MD
|
|
4
|
|
—
|
|
|
8,796
|
|
|
12,093
|
|
|
394
|
|
|
(2,830
|
)
|
|
8,796
|
|
|
9,657
|
|
|
18,453
|
|
|
(363
|
)
|
|
10/2/2017
|
|
1988
|
|||||||||
|
Gateway 270 West
|
|
Clarksburg, MD
|
|
6
|
|
—
|
|
|
12,104
|
|
|
9,688
|
|
|
516
|
|
|
—
|
|
|
12,104
|
|
|
10,204
|
|
|
22,308
|
|
|
(257
|
)
|
|
10/2/2017
|
|
2002
|
|||||||||
|
Snowden Center
|
|
Columbia, MD
|
|
5
|
|
—
|
|
|
7,955
|
|
|
10,128
|
|
|
119
|
|
|
—
|
|
|
7,955
|
|
|
10,247
|
|
|
18,202
|
|
|
(258
|
)
|
|
10/2/2017
|
|
1982
|
|||||||||
|
20400 Century Boulevard
|
|
Germantown, MD
|
|
1
|
|
—
|
|
|
2,305
|
|
|
9,890
|
|
|
1,304
|
|
|
—
|
|
|
2,347
|
|
|
11,152
|
|
|
13,499
|
|
|
(5,520
|
)
|
|
3/31/1997
|
|
1995
|
|||||||||
|
Cloverleaf Center
|
|
Germantown, MD
|
|
4
|
|
—
|
|
|
11,890
|
|
|
4,639
|
|
|
481
|
|
|
—
|
|
|
11,890
|
|
|
5,120
|
|
|
17,010
|
|
|
(167
|
)
|
|
10/2/2017
|
|
2000
|
|||||||||
|
Metro Park North
|
|
Rockville, MD
|
|
4
|
|
—
|
|
|
11,159
|
|
|
7,624
|
|
|
235
|
|
|
—
|
|
|
11,159
|
|
|
7,859
|
|
|
19,018
|
|
|
(236
|
)
|
|
10/2/2017
|
|
2001
|
|||||||||
|
Sterling Park Business Center
|
|
Sterling, VA
|
|
7
|
|
—
|
|
|
18,935
|
|
|
21,191
|
|
|
835
|
|
|
—
|
|
|
18,935
|
|
|
22,026
|
|
|
40,961
|
|
|
(643
|
)
|
|
10/2/2017
|
|
1990
|
|||||||||
|
|
|
|
|
36
|
|
—
|
|
|
115,347
|
|
|
100,411
|
|
|
4,027
|
|
|
(2,830
|
)
|
|
115,389
|
|
|
101,566
|
|
|
216,955
|
|
|
(8,171
|
)
|
|
|
|
|
|||||||||
|
|
|
|
|
247
|
|
$
|
335,241
|
|
|
$
|
1,038,737
|
|
|
$
|
2,904,700
|
|
|
$
|
225,424
|
|
|
$
|
(7,270
|
)
|
|
$
|
1,039,553
|
|
|
$
|
3,122,038
|
|
|
$
|
4,161,591
|
|
|
$
|
(383,318
|
)
|
|
|
|
|
|
|
Real Estate Properties
|
|
Accumulated Depreciation
|
||||
|
Balance at December 31, 2015
|
$
|
1,696,132
|
|
|
$
|
255,879
|
|
|
Additions
|
194,107
|
|
|
42,404
|
|
||
|
Disposals
|
(1,479
|
)
|
|
(1,479
|
)
|
||
|
Balance at December 31, 2016
|
1,888,760
|
|
|
296,804
|
|
||
|
Additions
|
1,100,138
|
|
|
45,315
|
|
||
|
Loss on asset impairment
|
(9,490
|
)
|
|
—
|
|
||
|
Disposals
|
(3,687
|
)
|
|
(271
|
)
|
||
|
Balance at December 31, 2017
|
2,975,721
|
|
|
341,848
|
|
||
|
Additions
|
1,486,342
|
|
|
65,215
|
|
||
|
Loss on asset impairment
|
(8,630
|
)
|
|
—
|
|
||
|
Disposals
|
(286,837
|
)
|
|
(18,740
|
)
|
||
|
Cost basis adjustment
(1)
|
(5,005
|
)
|
|
(5,005
|
)
|
||
|
Reclassification of assets of properties held for sale
|
(216,955
|
)
|
|
(8,171
|
)
|
||
|
Balance at December 31, 2018
|
$
|
3,944,636
|
|
|
$
|
375,147
|
|
|
|
OFFICE PROPERTIES INCOME TRUST
|
|
|
|
|
By:
|
/s/ David M. Blackman
|
|
|
|
|
David M. Blackman
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
Dated: February 28, 2019
|
|
|
|
|
|
|
|
Signature
|
Title
|
Date
|
|
|
|
|
|
/s/ David M. Blackman
|
Managing Trustee, President and Chief Executive Officer (principal executive officer)
|
February 28, 2019
|
|
David M. Blackman
|
||
|
|
|
|
|
/s/ Jeffrey C. Leer
|
Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer)
|
February 28, 2019
|
|
Jeffrey C. Leer
|
||
|
|
|
|
|
/s/ Adam D. Portnoy
|
Managing Trustee
|
February 28, 2019
|
|
Adam D. Portnoy
|
||
|
|
|
|
|
/s/ Donna D. Fraiche
|
Independent Trustee
|
February 28, 2019
|
|
Donna D. Fraiche
|
||
|
|
|
|
|
/s/ Barbara D. Gilmore
|
Independent Trustee
|
February 28, 2019
|
|
Barbara D. Gilmore
|
||
|
|
|
|
|
/s/ John L. Harrington
|
Independent Trustee
|
February 28, 2019
|
|
John L. Harrington
|
||
|
|
|
|
|
/s/ William A. Lamkin
|
Independent Trustee
|
February 28, 2019
|
|
William A. Lamkin
|
||
|
|
|
|
|
/s/ Elena Poptodorova
|
Independent Trustee
|
February 28, 2019
|
|
Elena Poptodorova
|
||
|
|
|
|
|
/s/ Jeffrey P. Somers
|
Independent Trustee
|
February 28, 2019
|
|
Jeffrey P. Somers
|
||
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|