Price Graph
Price
Yield
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.
When you register for our Service, we collect information from you such as your name, email address and credit card information.
Like many other websites we use “cookies”, which are small text files that are stored on your computer or other device that record your preferences and actions, including how you use the website. You can set your browser or device to refuse all cookies or to alert you when a cookie is being sent. If you delete your cookies, if you opt-out from cookies, some Services may not function properly. We collect information when you use our Service. This includes which pages you visit.
We use Google Analytics and we use Stripe for payment processing. We will not share the information we collect with third parties for promotional purposes. We may share personal information with law enforcement as required or permitted by law.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended December 31, 2016
|
|
|
or
|
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Maryland
(State of Organization)
|
26-4273474
(IRS Employer Identification No.)
|
|
|
|
|
Title Of Each Class
|
|
Name Of Each Exchange On Which Registered
|
|
Common Shares of Beneficial Interest
|
|
The NASDAQ Stock Market LLC
|
|
5.875% Senior Notes due 2046
|
|
The NASDAQ Stock Market LLC
|
|
Large accelerated filer ☒
|
Accelerated filer ☐
|
Non-accelerated filer ☐
(Do not check if a
smaller reporting company)
|
Smaller reporting company ☐
|
|
|
|
|
|
|
|
•
|
OUR ACQUISITIONS AND SALES OF PROPERTIES,
|
|
•
|
OUR ABILITY TO COMPETE FOR ACQUISITIONS AND TENANCIES EFFECTIVELY,
|
|
•
|
THE LIKELIHOOD THAT OUR TENANTS WILL PAY RENT OR BE NEGATIVELY AFFECTED BY CYCLICAL ECONOMIC CONDITIONS OR GOVERNMENT BUDGET CONSTRAINTS,
|
|
•
|
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,
|
|
•
|
OUR ABILITY TO PAY DISTRIBUTIONS TO OUR SHAREHOLDERS AND THE AMOUNT OF SUCH DISTRIBUTIONS,
|
|
•
|
OUR EXPECTATION THAT WE BENEFIT FINANCIALLY FROM OUR OWNERSHIP INTEREST IN SELECT INCOME REIT, OR SIR,
|
|
•
|
OUR POLICIES AND PLANS REGARDING INVESTMENTS, FINANCINGS AND DISPOSITIONS,
|
|
•
|
THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY,
|
|
•
|
OUR EXPECTATION THAT THERE WILL BE OPPORTUNITIES FOR US TO ACQUIRE, AND THAT WE WILL ACQUIRE, ADDITIONAL PROPERTIES THAT ARE MAJORITY LEASED TO GOVERNMENT TENANTS OR GOVERNMENT CONTRACTOR TENANTS,
|
|
•
|
OUR EXPECTATIONS REGARDING DEMAND FOR LEASED SPACE BY THE U.S. GOVERNMENT AND STATE AND LOCAL GOVERNMENTS,
|
|
•
|
OUR ABILITY TO RAISE EQUITY OR DEBT CAPITAL,
|
|
•
|
OUR ABILITY TO PAY INTEREST ON AND PRINCIPAL OF OUR DEBT,
|
|
•
|
OUR ABILITY TO APPROPRIATELY BALANCE OUR USE OF DEBT AND EQUITY CAPITAL,
|
|
•
|
OUR CREDIT RATINGS,
|
|
•
|
OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP OF THE RMR GROUP INC., OR RMR INC.,
|
|
•
|
OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP OF AFFILIATES INSURANCE COMPANY, OR AIC, AND FROM OUR PARTICIPATION IN INSURANCE PROGRAMS ARRANGED BY AIC,
|
|
•
|
THE CREDIT QUALITIES OF OUR TENANTS,
|
|
•
|
OUR QUALIFICATION FOR TAXATION AS A REAL ESTATE INVESTMENT TRUST, OR REIT, AND
|
|
•
|
OTHER MATTERS.
|
|
•
|
THE IMPACT OF CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS ON US AND OUR TENANTS,
|
|
•
|
COMPETITION WITHIN THE REAL ESTATE INDUSTRY, PARTICULARLY WITH RESPECT TO THOSE MARKETS IN WHICH OUR PROPERTIES ARE LOCATED AND WITH RESPECT TO GOVERNMENT TENANCIES,
|
|
•
|
THE IMPACT OF CHANGES IN THE REAL ESTATE NEEDS AND FINANCIAL CONDITIONS OF THE U.S. GOVERNMENT AND STATE AND LOCAL GOVERNMENTS,
|
|
•
|
COMPLIANCE WITH, AND CHANGES TO, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS, ACCOUNTING RULES, TAX LAWS AND SIMILAR MATTERS,
|
|
•
|
ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH OUR RELATED PARTIES, INCLUDING OUR MANAGING TRUSTEES, THE RMR GROUP LLC, OR RMR LLC, RMR INC., SIR, AIC AND OTHERS AFFILIATED WITH THEM,
|
|
•
|
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
|
|
•
|
ACTS OF TERRORISM, OUTBREAKS OF SO CALLED PANDEMICS OR OTHER MANMADE OR NATURAL DISASTERS BEYOND OUR CONTROL.
|
|
•
|
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, OUR WORKING CAPITAL REQUIREMENTS AND OUR RECEIPT OF DISTRIBUTIONS FROM SIR. 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,
|
|
•
|
OUR ABILITY TO GROW OUR BUSINESS AND INCREASE DISTRIBUTIONS TO OUR SHAREHOLDERS DEPENDS IN LARGE PART UPON OUR ABILITY TO BUY PROPERTIES AND LEASE THEM FOR RENTS, LESS PROPERTY OPERATING EXPENSES, THAT EXCEED OUR CAPITAL COSTS. WE MAY BE UNABLE TO IDENTIFY PROPERTIES THAT WE WANT TO ACQUIRE OR TO NEGOTIATE ACCEPTABLE PURCHASE PRICES, ACQUISITION FINANCING OR LEASE TERMS FOR NEW PROPERTIES,
|
|
•
|
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,
|
|
•
|
SOME GOVERNMENT TENANTS MAY EXERCISE THEIR RIGHTS TO VACATE THEIR SPACE BEFORE THE STATED EXPIRATION OF THEIR LEASES, AND WE MAY BE UNABLE TO OBTAIN NEW TENANTS TO MAINTAIN THE HISTORICAL OCCUPANCY RATES OF, OR RENTS FROM, OUR PROPERTIES,
|
|
•
|
RENTS THAT WE CAN CHARGE AT OUR PROPERTIES MAY DECLINE BECAUSE OF CHANGING MARKET CONDITIONS OR OTHERWISE,
|
|
•
|
CONTINGENCIES IN OUR ACQUISITION AND SALE AGREEMENTS MAY NOT BE SATISFIED AND OUR PENDING ACQUISITIONS AND SALES MAY NOT OCCUR, MAY BE DELAYED OR THE TERMS OF SUCH TRANSACTIONS MAY CHANGE,
|
|
•
|
CONTINUED AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY IS SUBJECT TO OUR SATISFYING CERTAIN FINANCIAL COVENANTS AND OTHER CUSTOMARY CREDIT FACILITY CONDITIONS THAT WE MAY BE UNABLE TO SATISFY,
|
|
•
|
ACTUAL COSTS UNDER OUR REVOLVING CREDIT FACILITY OR OTHER FLOATING RATE CREDIT FACILITIES WILL BE HIGHER THAN LIBOR PLUS A PREMIUM BECAUSE OF OTHER FEES AND EXPENSES ASSOCIATED WITH SUCH FACILITIES,
|
|
•
|
WE MAY BE UNABLE TO REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE,
|
|
•
|
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,
|
|
•
|
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,
|
|
•
|
THE BUSINESS MANAGEMENT AND PROPERTY MANAGEMENT AGREEMENTS BETWEEN US AND RMR LLC HAVE CONTINUING 20 YEAR TERMS. HOWEVER, THOSE AGREEMENTS INCLUDE TERMS WHICH PERMIT EARLY TERMINATION IN CERTAIN CIRCUMSTANCES. ACCORDINGLY, WE CANNOT BE SURE THAT THESE AGREEMENTS WILL REMAIN IN EFFECT FOR CONTINUING 20 YEAR TERMS OR FOR SHORTER TERMS,
|
|
•
|
WE BELIEVE THAT OUR RELATIONSHIPS WITH OUR RELATED PARTIES, INCLUDING RMR LLC, RMR INC., SIR, 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,
|
|
•
|
THE PREMIUMS USED TO DETERMINE THE INTEREST RATE PAYABLE ON OUR REVOLVING CREDIT FACILITY AND TERM LOANS AND THE FACILITY FEE PAYABLE ON OUR REVOLVING CREDIT FACILITY ARE BASED ON OUR CREDIT RATINGS. FUTURE CHANGES IN OUR CREDIT RATINGS MAY CAUSE THE INTEREST AND FEES WE PAY TO INCREASE,
|
|
•
|
SIR MAY REDUCE THE AMOUNT OF ITS DISTRIBUTIONS TO ITS SHAREHOLDERS, INCLUDING US,
|
|
•
|
WE MAY BE UNABLE TO
SELL OUR SIR
COMMON
SHARES FOR AN AMOUNT EQUAL TO OUR CARRYING VALUE OF THOSE SHARES AND ANY SUCH SALE MAY BE AT A DISCOUNT TO MARKET PRICE BECAUSE OF THE LARGE SIZE OF OUR SIR HOLDINGS OR OTHERWISE; WE MAY REALIZE A LOSS ON OUR INVESTMENT IN OUR SIR SHARES, AND
|
|
•
|
WE CURRENTLY EXPECT TO SPEND APPROXIMATELY
$15.4 MILLION
TO COMPLETE OUR REDEVELOPMENT AND EXPANSION OF AN EXISTING PROPERTY IN CONNECTION WITH A NEW LEASE AGREEMENT. IN ADDITION, AS OF DECEMBER 31 2016, WE HAVE ESTIMATED UNSPENT LEASING RELATED OBLIGATIONS OF
$26.5 MILLION
, EXCLUDING THE ESTIMATED DEVELOPMENT COSTS NOTED IN THE PRECEDING SENTENCE. IT IS DIFFICULT TO ACCURATELY ESTIMATE DEVELOPMENT COSTS. THIS DEVELOPMENT PROJECT AND OUR UNSPENT LEASING RELATED OBLIGATIONS MAY COST MORE OR LESS AND MAY TAKE LONGER TO COMPLETE THAN WE CURRENTLY EXPECT, AND WE MAY INCUR INCREASING AMOUNTS FOR THESE AND SIMILAR PURPOSES IN THE FUTURE.
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
the historic and expected operating expenses, including real estate taxes, incurred and expected to be incurred at the property;
|
|
•
|
the quality, experience and creditworthiness of the property’s tenant(s) and how essential the occupant’s mission at the property is to the tenant(s);
|
|
•
|
the construction quality, physical condition, age and design of the property and expected capital expenditures that may be needed at the property;
|
|
•
|
our weighted average long term cost of capital compared to the projected returns we may realize by owning the property;
|
|
•
|
the remaining length of the current lease and its other terms;
|
|
•
|
our expectation regarding tenant lease renewals or the likelihood of finding a replacement tenant if the property has significant vacancies or is likely to become substantially vacant;
|
|
•
|
the future expected space utilization of the tenant(s) and the potential impact that may have on occupancy at the property;
|
|
•
|
the potential costs associated with finding a replacement tenant, 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;
|
|
•
|
our evaluation of future rent for the property relative to leasing costs;
|
|
•
|
the capital required to maintain the property;
|
|
•
|
the strategic fit of the property or investment with the rest of our portfolio;
|
|
•
|
the estimated value we may receive by selling the property;
|
|
•
|
our intended use of the proceeds we may realize from the sale of a property;
|
|
•
|
the proposed sale price; and
|
|
•
|
the existence of alternative sources, uses or needs for capital.
|
|
•
|
a bank, insurance company or other financial institution;
|
|
•
|
a regulated investment company or REIT;
|
|
•
|
a subchapter S corporation;
|
|
•
|
a broker, dealer or trader in securities or foreign currency;
|
|
•
|
a person who marks-to-market our shares for U.S. federal income tax purposes;
|
|
•
|
a U.S. shareholder (as defined below) that has a functional currency other than the U.S. dollar;
|
|
•
|
a person who acquires or owns our shares in connection with employment or other performance of services;
|
|
•
|
a person subject to alternative minimum tax;
|
|
•
|
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;
|
|
•
|
a person who owns 10% or more (by vote or value, directly or constructively under the IRC) of any class of our shares;
|
|
•
|
a U.S. expatriate;
|
|
•
|
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;
|
|
•
|
a nonresident alien individual present in the United States for 183 days or more during an applicable taxable year;
|
|
•
|
a “qualified shareholder” (as defined in Section 897(k)(3)(A) of the IRC);
|
|
•
|
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; or
|
|
•
|
except as specifically described in the following summary, a trust, estate, tax-exempt entity or foreign person.
|
|
•
|
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;
|
|
•
|
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;
|
|
•
|
an estate the income of which is subject to federal income taxation regardless of its source; or
|
|
•
|
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;
|
|
•
|
We will be taxed at regular corporate tax rates on any undistributed “real estate investment trust taxable income,” determined by including our undistributed net capital gains, if any.
|
|
•
|
We may be subject to the corporate alternative minimum tax on our items of tax preference.
|
|
•
|
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 from other nonqualifying income from foreclosure property, we will be subject to tax on this income at the highest regular corporate tax rate.
|
|
•
|
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.
|
|
•
|
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.
|
|
•
|
If we fail to satisfy the REIT asset tests described 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 a tax equal to the greater of $50,000 or the highest regular corporate tax rate multiplied by the net income generated by the nonqualifying assets that caused us to fail the test.
|
|
•
|
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.
|
|
•
|
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.
|
|
•
|
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
|
|
•
|
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.
|
|
•
|
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.
|
|
(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.
|
|
•
|
At least 75% of our gross income for each taxable year (excluding: (a) gross income from sales or other dispositions of property subject to the 100% tax on prohibited transactions; (b) any income arising from “clearly identified” hedging transactions that we enter into to manage interest rate or price changes or currency fluctuations with respect to borrowings we incur to acquire or carry real estate assets; (c) any income arising from “clearly identified” hedging transactions that we enter into primarily to manage risk of currency fluctuations relating to any item that qualifies under the 75% gross income test or the 95% gross income test (or any property that generates such income or gain); (d) beginning with our 2016 taxable year, any income from “clearly identified” hedging transactions that we enter into to manage risk associated with extant, qualified hedges of liabilities or properties that have been extinguished or disposed; (e) real estate foreign exchange gain (as defined in Section 856(n)(2) of the IRC); and (f) income from the repurchase or discharge of indebtedness) must be derived from investments relating to real property, including “rents from real property” as defined under Section 856 of the IRC, interest and gain from mortgages on real property or on interests in real property, income and gain from foreclosure property, gain from the sale or other disposition of real property, or dividends on and gain from the sale or disposition of shares in other REITs (but excluding in all cases any gains subject to the 100% tax on prohibited transactions). When we receive new capital in exchange for our shares or in a public offering of our five-year or longer debt instruments, income attributable to the temporary investment of this new capital in stock or a debt instrument, if received or accrued within one year of our receipt of the new capital, is generally also qualifying income under the 75% gross income test.
|
|
•
|
At least 95% of our gross income for each taxable year (excluding: (a) gross income from sales or other dispositions of property subject to the 100% tax on prohibited transactions; (b) any income arising from “clearly identified” hedging transactions that we enter into to manage interest rate or price changes or currency fluctuations with respect to borrowings we incur to acquire or carry real estate assets; (c) any income arising from “clearly identified” hedging transactions that we enter into primarily to manage risk of currency fluctuations relating to any item that qualifies under the 75% gross income test or the 95% gross income test (or any property that generates such income or gain); (d) beginning with our 2016 taxable year, any income from “clearly identified” hedging transactions that we enter into to manage risk associated with extant, qualified hedges of liabilities or properties that have been extinguished or disposed; (e) passive foreign exchange gain (as defined in Section 856(n)(3) of the IRC); and (f) income from the repurchase or discharge of indebtedness) must be derived from a combination of items of real property income that satisfy the 75% gross income test described above, dividends, interest, or gains from the sale or disposition of stock, securities or real property (but excluding in all cases any gains subject to the 100% tax on prohibited transactions).
|
|
•
|
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
|
|
•
|
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 tenant services of the sort that a tax-exempt organization could perform without being considered in receipt of “unrelated business taxable income,” or UBTI, under Section 512(b)(3) of the IRC. In addition, a de minimis amount of noncustomary services provided to tenants 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 qualifies as “rents from real property.” None of the rent attributable to personal property received under a lease will qualify if this 15% threshold is exceeded. 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 geographical area, even if the charges are separately stated, as well as charges we receive for services provided by our TRSs when the charges are not separately stated. Whether separately stated charges received by a REIT for services that are not geographically customary and provided by a TRS are included in “rents from real property” has not been addressed clearly by the IRS in published authorities; however, our counsel, Sullivan & Worcester LLP, is of the opinion that, although the matter is not free from doubt, “rents from real property” also includes charges we receive for services provided by our TRSs when the charges are separately stated, even if the services are not geographically customary. Accordingly, we believe that our revenues from TRS-provided services, whether the charges are separately stated or not, qualify as “rents from real property” because the services satisfy the geographically customary standard, because the services have been provided by a TRS, or for both reasons.
|
|
•
|
own our assets for investment with a view to long-term income production and capital appreciation;
|
|
•
|
engage in the business of developing, owning, leasing and managing our existing properties and acquiring, developing, owning, leasing and managing new properties; and
|
|
•
|
make occasional dispositions of our assets consistent with our long-term investment objectives.
|
|
•
|
our failure to meet the test is due to reasonable cause and not due to willful neglect; and
|
|
•
|
after we identify the failure, we file a schedule describing each item of our gross income included in the 75% gross income test or the 95% gross income test for that taxable year.
|
|
•
|
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 (beginning with our 2016 taxable year), 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 (beginning with our 2016 taxable year), 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 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 25% (20% beginning with our 2018 taxable year) of the value of our total assets may be represented by stock or other securities of TRSs.
|
|
•
|
Beginning with our 2016 taxable year, 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.”
|
|
(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 built-in gains), net of the corporate taxes thereon.
|
|
(1)
|
we will be taxed at regular corporate capital gains tax rates on retained amounts;
|
|
(2)
|
each U.S. shareholder 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 U.S. shareholder will receive a credit or refund for its designated proportionate share of the tax that we pay;
|
|
(4)
|
each U.S. shareholder 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 and public and private companies;
|
|
•
|
contingencies in our acquisition agreements; and
|
|
•
|
the availability and terms of financing.
|
|
•
|
we do not believe that it is possible to fully understand a property before it is owned and operated for an extended 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 properties that we acquire may decline during our ownership and rents or returns that are in effect or expected at the time a property is acquired may decline thereafter;
|
|
•
|
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 properties; and
|
|
•
|
acquired properties might require significant management attention that would otherwise be devoted to our ongoing business.
|
|
•
|
Tenants occupying approximately
11.7%
of our rentable square feet and contributing approximately
9.3%
of our annualized rental income as of December 31, 2016, excluding one property (one building) classified as discontinued operations, have currently exercisable rights to terminate their leases before the stated term of their leases expire.
|
|
•
|
In
2017
,
2018
,
2019
,
2020
,
2021
,
2022
,
2023
, 2026 and 2027, early termination rights become exercisable by other tenants who currently occupy an additional approximately
2.3%
,
2.2%
,
4.9%
,
7.0%
,
0.7%
,
2.9%
,
1.9%
,
0.9%
and
0.6%
of our rentable square feet, respectively, and contribute an additional approximately
1.8%
,
3.0%
,
5.1%
,
7.5%
,
0.6%
,
2.3%
,
1.7%
,
1.1%
and
0.6%
of our annualized rental income, respectively, as of
December 31, 2016
.
|
|
•
|
Pursuant to leases with
15
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
15
tenants represent approximately
17.4%
of our rentable square feet and
16.9%
of our annualized rental income as of December 31, 2016.
|
|
•
|
Investors may consider whether to buy or sell our common shares based upon the distribution rate on our common shares relative to prevailing market interest rates. If market interest rates go up, investors may expect a higher distribution rate than we are able to pay or may sell our common shares and seek alternate investments with a higher distribution rate. Sales of our common shares may cause a decline in the market price of our common shares.
|
|
•
|
Amounts outstanding under our revolving credit facility and term loans require interest to be paid at variable interest rates. When interest rates increase, our interest costs will increase, which could adversely affect our cash flow, our ability to pay principal and interest on our debt, our cost of refinancing our debt when it becomes due and our ability to make or sustain the rate of distributions to our shareholders. Additionally, if we choose to hedge our interest rate risk, we cannot be sure that the hedge will be effective or that our hedging counterparty will meet its obligations to us.
|
|
•
|
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 market price of our common shares 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;
|
|
•
|
costs that may be incurred relating to property maintenance and repair, and the need to make expenditures due to changes in government regulations; and
|
|
•
|
litigation incidental to our business.
|
|
•
|
SIR may incur substantial amounts of indebtedness, which may adversely impact the market price of SIR’s common shares, including our SIR common shares;
|
|
•
|
SIR’s board of trustees may lower the amount of distributions that SIR pays to its shareholders, including us, which would reduce the cash flow we realize by owning our SIR common shares and could adversely impact our ability to make payments of principal and interest on our indebtedness and future distributions on our common shares;
|
|
•
|
SIR may determine to issue significant amounts of equity capital, which would dilute our ownership interest in SIR;
|
|
•
|
SIR may issue additional common shares at a per share price below the per share carrying value of our SIR common shares, which may require us to reduce our cost basis for our SIR common shares and recognize losses on our SIR investment;
|
|
•
|
SIR may incur losses because it is unable to maintain the occupancy or rents it now receives from its properties or because of increased operating expenses or otherwise, and any such losses may reduce the market price of our SIR common shares;
|
|
•
|
SIR’s board of trustees may change or revise SIR’s business plans and policies from time to time without shareholder approval, and any such changes could adversely affect SIR’s financial condition, results of operations, the market price of SIR’s common shares and SIR’s ability to make distributions to its shareholders; and
|
|
•
|
Our relationship with SIR may create conflicts of interest or the perception of such conflicts.
|
|
•
|
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;
|
|
•
|
shareholder voting rights and standards for the election of Trustees and other provisions which require larger majorities for approval of actions which are not approved by our Trustees than for actions which are approved by our 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;
|
|
•
|
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; and
|
|
•
|
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.
|
|
•
|
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 our distributions will be adversely affected if any of the risks described herein, or other significant events, 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
|
|
•
|
any distributions will be made at the discretion of our Board of Trustees and will depend upon various factors that our Board of Trustees deems relevant, including our results of operations, our financial condition, debt and equity capital available to us, our expectation of our future capital requirements, our funds from operations, or FFO, our normalized funds from operations, or Normalized FFO, restrictive covenants in our financial or other contractual arrangements (including those contained in our credit agreement), tax law requirements to maintain our qualification for taxation as a REIT, restrictions under Maryland law and our expected needs and availability of cash to pay our obligations.
|
|
•
|
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.
|
|
Property Location
|
|
Number of
Properties
|
|
Number of
Buildings
|
|
Undepreciated
Carrying
Value
(1)
|
|
Depreciated
Carrying
Value
(1)
|
|
Annualized
Rental
Income
(2)
|
||||||
|
Alabama
|
|
2
|
|
2
|
|
$
|
23,052
|
|
|
$
|
20,927
|
|
|
$
|
2,952
|
|
|
Arizona
|
|
2
|
|
2
|
|
21,834
|
|
|
19,475
|
|
|
2,335
|
|
|||
|
California
|
|
11
|
|
11
|
|
296,317
|
|
|
245,728
|
|
|
39,239
|
|
|||
|
Colorado
|
|
3
|
|
5
|
|
68,836
|
|
|
50,747
|
|
|
10,628
|
|
|||
|
District of Columbia
|
|
2
|
|
2
|
|
142,244
|
|
|
105,634
|
|
|
26,422
|
|
|||
|
Florida
|
|
2
|
|
2
|
|
48,817
|
|
|
42,530
|
|
|
6,802
|
|
|||
|
Georgia
|
|
5
|
|
9
|
|
146,917
|
|
|
123,892
|
|
|
23,635
|
|
|||
|
Idaho
|
|
1
|
|
3
|
|
33,209
|
|
|
29,957
|
|
|
4,681
|
|
|||
|
Illinois
|
|
1
|
|
1
|
|
15,536
|
|
|
12,945
|
|
|
2,120
|
|
|||
|
Indiana
|
|
1
|
|
3
|
|
75,944
|
|
|
66,324
|
|
|
9,905
|
|
|||
|
Kansas
|
|
1
|
|
1
|
|
13,680
|
|
|
11,689
|
|
|
3,029
|
|
|||
|
Kentucky
|
|
1
|
|
1
|
|
13,438
|
|
|
12,264
|
|
|
2,539
|
|
|||
|
Maryland
|
|
7
|
|
8
|
|
167,330
|
|
|
131,475
|
|
|
19,553
|
|
|||
|
Massachusetts
|
|
4
|
|
4
|
|
83,009
|
|
|
71,651
|
|
|
13,571
|
|
|||
|
Michigan
|
|
1
|
|
1
|
|
18,655
|
|
|
15,654
|
|
|
2,714
|
|
|||
|
Minnesota
|
|
2
|
|
2
|
|
39,892
|
|
|
32,504
|
|
|
3,906
|
|
|||
|
Mississippi
|
|
1
|
|
1
|
|
25,946
|
|
|
23,126
|
|
|
3,792
|
|
|||
|
Missouri
|
|
2
|
|
2
|
|
25,639
|
|
|
20,683
|
|
|
4,016
|
|
|||
|
New Hampshire
|
|
1
|
|
1
|
|
17,491
|
|
|
14,849
|
|
|
2,310
|
|
|||
|
New Jersey
|
|
1
|
|
1
|
|
45,067
|
|
|
39,149
|
|
|
5,923
|
|
|||
|
New Mexico
|
|
1
|
|
1
|
|
2,418
|
|
|
2,147
|
|
|
—
|
|
|||
|
New York
|
|
4
|
|
4
|
|
168,994
|
|
|
145,945
|
|
|
20,870
|
|
|||
|
Oregon
|
|
1
|
|
1
|
|
28,670
|
|
|
25,406
|
|
|
5,151
|
|
|||
|
South Carolina
|
|
1
|
|
3
|
|
17,333
|
|
|
14,225
|
|
|
2,126
|
|
|||
|
Tennessee
|
|
1
|
|
1
|
|
9,696
|
|
|
8,528
|
|
|
3,028
|
|
|||
|
Texas
|
|
1
|
|
1
|
|
13,516
|
|
|
8,841
|
|
|
2,201
|
|
|||
|
Vermont
|
|
1
|
|
1
|
|
9,236
|
|
|
7,797
|
|
|
1,114
|
|
|||
|
Virginia
|
|
7
|
|
14
|
|
252,039
|
|
|
241,299
|
|
|
38,994
|
|
|||
|
Washington
|
|
2
|
|
4
|
|
42,693
|
|
|
32,121
|
|
|
5,447
|
|
|||
|
West Virginia
|
|
1
|
|
1
|
|
5,062
|
|
|
3,057
|
|
|
767
|
|
|||
|
Wisconsin
|
|
1
|
|
1
|
|
5,587
|
|
|
4,942
|
|
|
795
|
|
|||
|
Wyoming
|
|
1
|
|
1
|
|
10,663
|
|
|
6,445
|
|
|
1,791
|
|
|||
|
Total
|
|
73
|
|
95
|
|
$
|
1,888,760
|
|
|
$
|
1,591,956
|
|
|
$
|
272,356
|
|
|
(1)
|
Excludes value assigned to real estate intangibles in purchase price allocation.
|
|
(2)
|
Annualized rental income is defined as the annualized contractual base rents from our tenants pursuant to our lease agreements as of
December 31, 2016
, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization.
|
|
|
|
High
|
|
Low
|
||||
|
2016
|
|
|
|
|
||||
|
First Quarter
|
|
$
|
17.90
|
|
|
$
|
12.33
|
|
|
Second Quarter
|
|
23.07
|
|
|
17.59
|
|
||
|
Third Quarter
|
|
24.61
|
|
|
21.82
|
|
||
|
Fourth Quarter
|
|
22.67
|
|
|
17.66
|
|
||
|
2015
|
|
|
|
|
||||
|
First Quarter
|
|
$
|
23.80
|
|
|
$
|
22.11
|
|
|
Second Quarter
|
|
23.15
|
|
|
18.40
|
|
||
|
Third Quarter
|
|
19.34
|
|
|
15.10
|
|
||
|
Fourth Quarter
|
|
17.97
|
|
|
15.35
|
|
||
|
|
|
Cash
Distributions
Per Common Share
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
First Quarter
|
|
$
|
0.43
|
|
|
$
|
0.43
|
|
|
Second Quarter
|
|
0.43
|
|
|
0.43
|
|
||
|
Third Quarter
|
|
0.43
|
|
|
0.43
|
|
||
|
Fourth Quarter
|
|
0.43
|
|
|
0.43
|
|
||
|
Total
|
|
$
|
1.72
|
|
|
$
|
1.72
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
Income statement data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Rental income
|
|
$
|
258,180
|
|
|
$
|
248,549
|
|
|
$
|
251,031
|
|
|
$
|
226,910
|
|
|
$
|
203,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Real estate taxes
|
|
30,703
|
|
|
29,906
|
|
|
28,389
|
|
|
25,710
|
|
|
22,485
|
|
|||||
|
Utility expenses
|
|
17,269
|
|
|
17,916
|
|
|
19,369
|
|
|
17,116
|
|
|
15,767
|
|
|||||
|
Other operating expenses
|
|
54,290
|
|
|
50,425
|
|
|
45,982
|
|
|
41,134
|
|
|
37,074
|
|
|||||
|
Depreciation and amortization
|
|
73,153
|
|
|
68,696
|
|
|
66,593
|
|
|
55,699
|
|
|
49,070
|
|
|||||
|
Loss on impairment of real estate
|
|
—
|
|
|
—
|
|
|
2,016
|
|
|
—
|
|
|
—
|
|
|||||
|
Acquisition related costs
|
|
1,191
|
|
|
811
|
|
|
1,344
|
|
|
2,439
|
|
|
1,614
|
|
|||||
|
General and administrative
|
|
14,897
|
|
|
14,826
|
|
|
15,809
|
|
|
12,710
|
|
|
11,924
|
|
|||||
|
Total expenses
|
|
191,503
|
|
|
182,580
|
|
|
179,502
|
|
|
154,808
|
|
|
137,934
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating income
|
|
66,677
|
|
|
65,969
|
|
|
71,529
|
|
|
72,102
|
|
|
65,766
|
|
|||||
|
Dividend income
|
|
971
|
|
|
811
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Interest income
|
|
158
|
|
|
14
|
|
|
69
|
|
|
37
|
|
|
29
|
|
|||||
|
Interest expense
|
|
(45,060
|
)
|
|
(37,008
|
)
|
|
(28,048
|
)
|
|
(16,831
|
)
|
|
(16,892
|
)
|
|||||
|
Gain (loss) on early extinguishment of debt
|
|
104
|
|
|
34
|
|
|
(1,307
|
)
|
|
—
|
|
|
—
|
|
|||||
|
Loss on distribution to common shareholders of The RMR Group Inc. common stock
|
|
—
|
|
|
(12,368
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Net gain (loss) on issuance of shares by Select Income REIT
|
|
86
|
|
|
(42,145
|
)
|
|
(53
|
)
|
|
—
|
|
|
—
|
|
|||||
|
Loss on impairment of Select Income REIT investment
|
|
—
|
|
|
(203,297
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Income (loss) from continuing operations before income taxes and equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
in earnings of investees
|
|
22,936
|
|
|
(227,990
|
)
|
|
42,190
|
|
|
55,308
|
|
|
48,903
|
|
|||||
|
Income tax expense
|
|
(101
|
)
|
|
(86
|
)
|
|
(117
|
)
|
|
(133
|
)
|
|
(159
|
)
|
|||||
|
Equity in earnings of investees
|
|
35,518
|
|
|
18,640
|
|
|
10,963
|
|
|
334
|
|
|
316
|
|
|||||
|
Income (loss) from continuing operations
|
|
58,353
|
|
|
(209,436
|
)
|
|
53,036
|
|
|
55,509
|
|
|
49,060
|
|
|||||
|
Income (loss) from discontinued operations
|
|
(589
|
)
|
|
(525
|
)
|
|
3,498
|
|
|
(889
|
)
|
|
900
|
|
|||||
|
Income (loss) before gain on sale of property
|
|
57,764
|
|
|
(209,961
|
)
|
|
56,534
|
|
|
54,620
|
|
|
49,960
|
|
|||||
|
Gain on sale of property
|
|
79
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Net income (loss)
|
|
$
|
57,843
|
|
|
$
|
(209,961
|
)
|
|
$
|
56,534
|
|
|
$
|
54,620
|
|
|
$
|
49,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Weighted average shares outstanding (basic)
|
|
71,050
|
|
|
70,700
|
|
|
61,313
|
|
|
54,606
|
|
|
48,558
|
|
|||||
|
Weighted average shares outstanding (diluted)
|
|
71,071
|
|
|
70,700
|
|
|
61,399
|
|
|
54,685
|
|
|
48,644
|
|
|||||
|
Per common share data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Income (loss) from continuing operations (basic)
|
|
$
|
0.82
|
|
|
$
|
(2.96
|
)
|
|
$
|
0.87
|
|
|
$
|
1.02
|
|
|
$
|
1.01
|
|
|
Income (loss) from continuing operations (diluted)
|
|
$
|
0.82
|
|
|
$
|
(2.96
|
)
|
|
$
|
0.86
|
|
|
$
|
1.02
|
|
|
$
|
1.01
|
|
|
Income (loss) from discontinued operations (basic and diluted)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.06
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.02
|
|
|
Net income (loss) (basic and diluted)
|
|
$
|
0.81
|
|
|
$
|
(2.97
|
)
|
|
$
|
0.92
|
|
|
$
|
1.00
|
|
|
$
|
1.03
|
|
|
Common distributions paid
|
|
$
|
1.72
|
|
|
$
|
1.72
|
|
(1)
|
$
|
1.72
|
|
|
$
|
1.72
|
|
|
$
|
1.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
As of December 31,
|
||||||||||||||||||
|
Balance sheet data:
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
Total real estate investments, gross
(2)
|
|
$
|
1,888,760
|
|
|
$
|
1,696,132
|
|
|
$
|
1,682,480
|
|
|
$
|
1,568,562
|
|
|
$
|
1,467,863
|
|
|
Real estate investments, net
(2)
|
|
1,591,956
|
|
|
1,440,253
|
|
|
1,462,689
|
|
|
1,380,927
|
|
|
1,311,202
|
|
|||||
|
Total assets
|
|
2,385,066
|
|
|
2,168,510
|
|
|
2,419,908
|
|
|
1,630,789
|
|
|
1,559,912
|
|
|||||
|
Debt, net
|
|
1,381,852
|
|
|
1,145,598
|
|
|
1,077,410
|
|
|
596,063
|
|
|
490,405
|
|
|||||
|
Shareholders' equity
|
|
935,004
|
|
|
956,651
|
|
|
1,297,449
|
|
|
989,675
|
|
|
1,027,451
|
|
|||||
|
(1)
|
Excludes a non-cash distribution of $0.1284 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.
|
|
|
|
|
|
|
|
Comparable
|
||||||
|
|
|
All Properties
(1)
|
|
Properties
(2)
|
||||||||
|
|
|
December 31,
|
|
December 31,
|
||||||||
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
|
Total properties
|
|
73
|
|
|
71
|
|
|
70
|
|
|
70
|
|
|
Total buildings
|
|
95
|
|
|
91
|
|
|
90
|
|
|
90
|
|
|
Total square feet
(3)
|
|
11,443
|
|
|
10,701
|
|
|
10,612
|
|
|
10,666
|
|
|
Percent leased
(3)(4)
|
|
95.1
|
%
|
|
94.5
|
%
|
|
95.1
|
%
|
|
94.8
|
%
|
|
(1)
|
Based on properties we owned on
December 31, 2016
and
2015
, respectively, excluding one property (one building) classified as discontinued operations.
|
|
(2)
|
Based on properties we owned on
December 31, 2016
and which we owned continuously since January 1, 2015, excluding one property (one building) classified as discontinued operations. Our comparable properties increased from 67 properties (86 buildings) at
December 31, 2015
as a result of our acquisition of four properties (five buildings) during the year ended
December 31, 2014
, offset by the sale of one property (one building) during the
year ended
December 31, 2016
.
|
|
(3)
|
Subject to changes when space is re-measured or re-configured for tenants.
|
|
(4)
|
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,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
Average annualized effective rental rate per square foot
(1)
:
|
|
|
|
|
||||
|
All properties
(2)
|
|
$
|
25.26
|
|
|
$
|
24.73
|
|
|
Comparable properties
(3)
|
|
$
|
25.03
|
|
|
$
|
24.72
|
|
|
(1)
|
Average annualized effective rental rate per square foot represents annualized total rental income during the period specified divided by the average rentable square feet leased during the period specified. Excludes one property (one building) classified as discontinued operations.
|
|
(2)
|
Based on properties we owned on
December 31, 2016
and 2015, respectively, excluding one property (one building) classified as discontinued operations.
|
|
(3)
|
Based on properties we owned on
December 31, 2016
and which we owned continuously since January 1, 2015 excluding one property (one building) classified as discontinued operations.
|
|
|
|
Year Ended December 31, 2016
|
|||||||
|
|
|
|
|
Available
|
|
|
|||
|
|
|
Leased
|
|
for Lease
|
|
Total
|
|||
|
Beginning of year
|
|
10,115,001
|
|
|
585,963
|
|
|
10,700,964
|
|
|
Changes resulting from:
|
|
|
|
|
|
|
|
|
|
|
Acquisition of properties
|
|
773,429
|
|
|
56,756
|
|
|
830,185
|
|
|
Disposition of properties
|
|
—
|
|
|
(35,228
|
)
|
|
(35,228
|
)
|
|
Lease expirations
|
|
(1,594,603
|
)
|
|
1,594,603
|
|
|
—
|
|
|
Lease renewals
(1)
|
|
1,394,256
|
|
|
(1,394,256
|
)
|
|
—
|
|
|
New leases
(1)(2)
|
|
193,206
|
|
|
(193,206
|
)
|
|
—
|
|
|
Re-measurements
(3)
|
|
—
|
|
|
(53,408
|
)
|
|
(53,408
|
)
|
|
End of year
|
|
10,881,289
|
|
|
561,224
|
|
|
11,442,513
|
|
|
(1)
|
Based on leases entered into during the
year ended
December 31, 2016
.
|
|
(2)
|
Rentable square footage of new leases for the
year ended
December 31, 2016
excludes a
25,579
square foot expansion to be constructed at an existing property prior to the commencement of the lease.
|
|
(3)
|
Rentable square footage is subject to changes when space is re-measured or re-configured for tenants.
|
|
|
|
Year Ended December 31, 2016
|
|||||||||
|
|
|
Old Effective
|
|
New Effective
|
|
|
|||||
|
|
|
Rent Per
|
|
Rent Per
|
|
Rentable
|
|||||
|
|
|
Square Foot
(1)
|
|
Square Foot
(1)
|
|
Square Feet
|
|||||
|
New leases
|
|
$
|
29.08
|
|
|
$
|
23.33
|
|
|
185,715
|
|
|
Lease renewals
|
|
$
|
31.27
|
|
|
$
|
32.78
|
|
|
1,406,025
|
|
|
Total leasing activity
|
|
$
|
31.01
|
|
|
$
|
31.68
|
|
|
1,591,740
|
|
|
(1)
|
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, 2016
|
||||||||||
|
|
|
Government
|
|
Non-Government
|
|
|
||||||
|
|
|
Leases
|
|
Leases
|
|
Total
|
||||||
|
Rentable square feet leased during the year
(1)
|
|
1,381,593
|
|
|
231,448
|
|
|
1,613,041
|
|
|||
|
Tenant leasing costs and concession commitments
(2)(3)
(in thousands)
|
|
$
|
32,207
|
|
|
$
|
6,282
|
|
|
$
|
38,489
|
|
|
Tenant leasing costs and concession commitments per rentable square foot
(2)(3)
|
|
$
|
23.31
|
|
|
$
|
27.14
|
|
|
$
|
23.86
|
|
|
Weighted (by square feet) average lease term (years)
|
|
9.1
|
|
|
6.1
|
|
|
8.6
|
|
|||
|
Total leasing costs and concession commitments per rentable square foot per year
(1)(2)(3)
|
|
$
|
2.57
|
|
|
$
|
4.44
|
|
|
$
|
2.76
|
|
|
(1)
|
Includes a
25,579
square foot expansion to be constructed at an existing property prior to the commencement of the lease.
|
|
(2)
|
Includes commitments made for leasing expenditures and concessions, such as tenant improvements, leasing commissions, tenant reimbursements and free rent.
|
|
(3)
|
Excludes the estimated cost of
$19,742
to redevelop and expand an existing property prior to the commencement of the lease.
|
|
|
|
Year Ended
|
||||||
|
|
|
December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
Tenant improvements
(1)
|
|
$
|
15,856
|
|
|
$
|
7,802
|
|
|
Leasing costs
(2)
|
|
$
|
9,949
|
|
|
$
|
5,166
|
|
|
Building improvements
(3)
|
|
$
|
11,261
|
|
|
$
|
9,407
|
|
|
Development, redevelopment and other activities
(4)
|
|
$
|
7,818
|
|
|
$
|
2,414
|
|
|
(1)
|
Tenant improvements include capital expenditures used to improve tenants’ space or amounts paid directly to tenants to improve their space.
|
|
(2)
|
Leasing costs include leasing related costs, such as brokerage commissions and other tenant inducements.
|
|
(3)
|
Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets.
|
|
(4)
|
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.
|
|
|
|
Number
|
|
Expirations
|
|
|
|
|
|
|
|
Annualized
|
|
|
|
|
||||||||
|
|
|
of
|
|
of Leased
|
|
|
|
|
|
Cumulative
|
|
Rental
|
|
|
|
Cumulative
|
||||||||
|
|
|
Tenants
|
|
Square
|
|
|
|
Percent
|
|
Percent
|
|
Income
|
|
Percent
|
|
Percent
|
||||||||
|
Year
(1)
|
|
Expiring
|
|
Feet
(2)
|
|
|
|
of Total
|
|
of Total
|
|
Expiring
|
|
of Total
|
|
of Total
|
||||||||
|
2017
|
|
45
|
|
|
904,299
|
|
|
|
|
8.3
|
%
|
|
8.3
|
%
|
|
$
|
20,065
|
|
|
7.4
|
%
|
|
7.4
|
%
|
|
2018
|
|
41
|
|
|
1,225,044
|
|
|
|
|
11.3
|
%
|
|
19.6
|
%
|
|
36,471
|
|
|
13.4
|
%
|
|
20.8
|
%
|
|
|
2019
|
|
41
|
|
|
1,907,410
|
|
|
|
|
17.5
|
%
|
|
37.1
|
%
|
|
57,622
|
|
|
21.2
|
%
|
|
42.0
|
%
|
|
|
2020
|
|
33
|
|
|
1,307,618
|
|
|
|
|
12.0
|
%
|
|
49.1
|
%
|
|
31,101
|
|
|
11.4
|
%
|
|
53.4
|
%
|
|
|
2021
|
|
37
|
|
|
1,059,747
|
|
|
|
|
9.7
|
%
|
|
58.8
|
%
|
|
20,802
|
|
|
7.6
|
%
|
|
61.0
|
%
|
|
|
2022
|
|
20
|
|
|
907,530
|
|
|
|
|
8.3
|
%
|
|
67.1
|
%
|
|
21,828
|
|
|
8.0
|
%
|
|
69.0
|
%
|
|
|
2023
|
|
15
|
|
|
600,262
|
|
|
|
|
5.5
|
%
|
|
72.6
|
%
|
|
13,866
|
|
|
5.1
|
%
|
|
74.1
|
%
|
|
|
2024
|
|
14
|
|
|
980,097
|
|
|
|
|
9.0
|
%
|
|
81.6
|
%
|
|
22,196
|
|
|
8.1
|
%
|
|
82.2
|
%
|
|
|
2025
|
|
11
|
|
|
585,990
|
|
|
|
|
5.4
|
%
|
|
87.0
|
%
|
|
11,136
|
|
|
4.1
|
%
|
|
86.3
|
%
|
|
|
2026 and thereafter
|
|
23
|
|
|
1,403,292
|
|
|
(3)
|
|
13.0
|
%
|
|
100.0
|
%
|
|
37,269
|
|
|
13.7
|
%
|
|
100.0
|
%
|
|
|
Total
|
|
280
|
|
|
10,881,289
|
|
|
|
|
100.0
|
%
|
|
|
|
$
|
272,356
|
|
|
100.0
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted average remaining lease term (in years)
|
|
5.0
|
|
|
|
|
|
|
|
4.8
|
|
|
|
|
||||||||||
|
(1)
|
The year of lease expiration is pursuant to current contract terms. Some government tenants have the right to vacate their space before the stated expirations of their leases. As of
December 31, 2016
, government tenants occupying approximately
11.7%
of our rentable square feet and responsible for approximately
9.3%
of our annualized rental income as of
December 31, 2016
have currently exercisable rights to terminate their leases before the stated terms of their leases expire. Also, in
2017
,
2018
,
2019
,
2020
,
2021
,
2022
,
2023
, 2026 and 2027, early termination rights become exercisable by other tenants who currently occupy an additional approximately
2.3%
,
2.2%
,
4.9%
,
7.0%
,
0.7%
,
2.9%
,
1.9%
,
0.9%
and
0.6%
of our rentable square feet, respectively, and contribute an additional approximately
1.8%
,
3.0%
,
5.1%
,
7.5%
,
0.6%
,
2.3%
,
1.7%
,
1.1%
and
0.6%
of our annualized rental income,
|
|
(2)
|
Leased square feet is pursuant to leases existing as of
December 31, 2016
, 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.
|
|
(3)
|
Leased square footage excludes a
25,579
square foot expansion to be constructed at an existing property prior to the commencement of the lease.
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
%
|
||||||||||||||||||||||
|
|
|
2016
|
|
2015
|
|
Change
|
|
Change
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Change
|
|
Change
|
||||||||||||||||||||||
|
Rental income
|
|
$
|
249,430
|
|
|
$
|
246,747
|
|
|
$
|
2,683
|
|
|
1.1
|
%
|
|
$
|
8,735
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
1,802
|
|
|
$
|
258,180
|
|
|
$
|
248,549
|
|
|
$
|
9,631
|
|
|
3.9
|
%
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Real estate taxes
|
|
29,757
|
|
|
29,633
|
|
|
124
|
|
|
0.4
|
%
|
|
918
|
|
|
—
|
|
|
28
|
|
|
273
|
|
|
30,703
|
|
|
29,906
|
|
|
797
|
|
|
2.7
|
%
|
||||||||||
|
Utility expenses
|
|
16,667
|
|
|
17,750
|
|
|
(1,083
|
)
|
|
(6.1
|
%)
|
|
578
|
|
|
—
|
|
|
24
|
|
|
166
|
|
|
17,269
|
|
|
17,916
|
|
|
(647
|
)
|
|
(3.6
|
%)
|
||||||||||
|
Other operating expenses
|
|
52,212
|
|
|
49,946
|
|
|
2,266
|
|
|
4.5
|
%
|
|
2,019
|
|
|
—
|
|
|
59
|
|
|
479
|
|
|
54,290
|
|
|
50,425
|
|
|
3,865
|
|
|
7.7
|
%
|
||||||||||
|
Total operating expenses
|
|
98,636
|
|
|
97,329
|
|
|
1,307
|
|
|
1.3
|
%
|
|
3,515
|
|
|
—
|
|
|
111
|
|
|
918
|
|
|
102,262
|
|
|
98,247
|
|
|
4,015
|
|
|
4.1
|
%
|
||||||||||
|
Net operating income
(4)
|
|
$
|
150,794
|
|
|
$
|
149,418
|
|
|
$
|
1,376
|
|
|
0.92
|
%
|
|
$
|
5,220
|
|
|
$
|
—
|
|
|
$
|
(96
|
)
|
|
$
|
884
|
|
|
155,918
|
|
|
150,302
|
|
|
5,616
|
|
|
3.7
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Other expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Depreciation and amortization
|
|
|
|
|
|
73,153
|
|
|
68,696
|
|
|
4,457
|
|
|
6.5
|
%
|
||||||||||||||||||||||||||||||
|
Acquisition related costs
|
|
|
|
|
|
1,191
|
|
|
811
|
|
|
380
|
|
|
46.9
|
%
|
||||||||||||||||||||||||||||||
|
General and administrative
|
|
|
|
|
|
14,897
|
|
|
14,826
|
|
|
71
|
|
|
0.5
|
%
|
||||||||||||||||||||||||||||||
|
Total other expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
89,241
|
|
|
84,333
|
|
|
4,908
|
|
|
5.8
|
%
|
||||||||||||||||||
|
Operating income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,677
|
|
|
65,969
|
|
|
708
|
|
|
1.1
|
%
|
||||||||||||||||||
|
Dividend income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
971
|
|
|
811
|
|
|
160
|
|
|
19.7
|
%
|
||||||||||||||||||
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
158
|
|
|
14
|
|
|
144
|
|
|
nm
|
|
||||||||||||||||||
|
Interest expense (including net amortization of debt premium and discounts and debt issuance costs of $2,832 and $1,376, respectively)
|
|
(45,060
|
)
|
|
(37,008
|
)
|
|
(8,052
|
)
|
|
21.8
|
%
|
||||||||||||||||||||||||||||||||||
|
Gain on early extinguishment of debt
|
|
|
|
|
|
104
|
|
|
34
|
|
|
70
|
|
|
205.9
|
%
|
||||||||||||||||||||||||||||||
|
Loss on distribution to common shareholders of The RMR Group Inc. common stock
|
|
—
|
|
|
(12,368
|
)
|
|
12,368
|
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Net gain (loss) on issuance of shares by Select Income REIT
|
|
86
|
|
|
(42,145
|
)
|
|
42,231
|
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Loss on impairment of Select Income REIT investment
|
|
—
|
|
|
(203,297
|
)
|
|
203,297
|
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes and equity in earnings of investees
|
|
22,936
|
|
|
(227,990
|
)
|
|
250,926
|
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Income tax expense
|
|
(101
|
)
|
|
(86
|
)
|
|
(15
|
)
|
|
17.4
|
%
|
||||||||||||||||||||||||||||||||||
|
Equity in earnings of investees
|
|
35,518
|
|
|
18,640
|
|
|
16,878
|
|
|
90.5
|
%
|
||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations
|
|
58,353
|
|
|
(209,436
|
)
|
|
267,789
|
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Loss from discontinued operations
|
|
(589
|
)
|
|
(525
|
)
|
|
(64
|
)
|
|
12.2
|
%
|
||||||||||||||||||||||||||||||||||
|
Income (loss) before gain on sale of property
|
|
57,764
|
|
|
(209,961
|
)
|
|
267,725
|
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Gain on sale of property
|
|
79
|
|
|
—
|
|
|
79
|
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Net income (loss)
|
|
$
|
57,843
|
|
|
$
|
(209,961
|
)
|
|
$
|
267,804
|
|
|
nm
|
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Weighted average common shares outstanding (basic)
|
|
71,050
|
|
|
70,700
|
|
|
350
|
|
|
0.5
|
%
|
||||||||||||||||||||||||||||||||||
|
Weighted average common shares outstanding (diluted)
|
|
71,071
|
|
|
70,700
|
|
|
371
|
|
|
0.5
|
%
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Per common share amounts (basic and diluted):
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations
|
|
$
|
0.82
|
|
|
$
|
(2.96
|
)
|
|
$
|
3.78
|
|
|
nm
|
|
|||||||||||||||||||||||||||||||
|
Loss from discontinued operations
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
—
|
|
|
—
|
%
|
|||||||||||||||||||||||||||||||
|
Net income (loss)
|
|
$
|
0.81
|
|
|
$
|
(2.97
|
)
|
|
$
|
3.78
|
|
|
nm
|
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Calculation of Funds From Operations and Normalized Funds From Operations
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
57,843
|
|
|
$
|
(209,961
|
)
|
|
|
|
|
||||||||||||||||||
|
Plus: Depreciation and amortization
|
|
|
|
|
|
73,153
|
|
|
68,696
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Plus: FFO attributable to Select Income REIT investment
|
|
|
|
|
|
71,227
|
|
|
56,105
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Less: Equity in earnings from Select Income REIT
|
|
|
|
|
|
(35,381
|
)
|
|
(18,620
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Less: Gain on sale of property
|
|
|
|
|
|
(79
|
)
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Funds from operations
|
|
|
|
|
|
166,763
|
|
|
(103,780
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Plus: Acquisition related costs
|
|
|
|
|
|
1,191
|
|
|
811
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Plus: Loss on distribution to common shareholders of The RMR Group Inc. common stock
|
|
|
|
|
|
—
|
|
|
12,368
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Plus: Loss on issuance of shares by Select Income REIT
|
|
|
|
|
|
2
|
|
|
42,145
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Plus: Loss on impairment of Select Income REIT investment
|
|
|
|
|
|
—
|
|
|
203,297
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Plus: Normalized FFO attributable to Select Income REIT investment
|
|
|
|
|
|
71,313
|
|
|
70,012
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Less: FFO attributable to Select Income REIT investment
|
|
|
|
|
|
(71,227
|
)
|
|
(56,105
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Less: Gain on early extinguishment of debt
|
|
|
|
|
|
(104
|
)
|
|
(34
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Less: Gain on issuance of shares by Select Income REIT
|
|
|
|
|
|
(88
|
)
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Normalized funds from operations
|
|
|
|
|
|
$
|
167,850
|
|
|
$
|
168,714
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Funds from operations per common share (basic and diluted)
|
|
|
|
|
|
$
|
2.35
|
|
|
$
|
(1.47
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Normalized funds from operations per common share (basic and diluted)
|
|
|
|
|
|
$
|
2.36
|
|
|
$
|
2.39
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
(1)
|
Comparable properties consist of
70
properties (
90
buildings) we owned on
December 31, 2016
and which we owned continuously since January 1, 2015, and excludes one property (one building) classified as discontinued operations.
|
|
(2)
|
Acquired properties consists of three properties (five buildings) we acquired during the year ended
December 31, 2016
.
|
|
(3)
|
Disposed properties consists of one property (one building) we sold during the year ended December 31, 2015 and one property (one building) we sold during the year ended
December 31, 2016
.
|
|
(4)
|
The calculation of net operating income, or NOI, excludes certain components of net income (loss) in order to provide results that are more closely related to our property level results of operations. We define NOI as income from our rental of real estate less our property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions because we record those amounts as depreciation and amortization. We consider NOI to be an appropriate supplemental measure to net income (loss) because it may help both investors and management to understand the operations of our properties. We use NOI to evaluate individual and company wide property level performance, and we believe that 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. NOI does not represent cash generated by operating activities in accordance with U.S. generally accepted accounting principles, or GAAP, and should not be considered as an alternative to net income (loss) or operating income 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 operating income as presented in our Consolidated Statements of Comprehensive Income (Loss). Other REITs and real estate companies may calculate NOI differently than we do.
|
|
(5)
|
We calculate funds from operations, or FFO, and normalized funds from operations, or Normalized FFO, as shown above. FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, or NAREIT, which is net income (loss), calculated in accordance with GAAP, plus real estate depreciation and amortization and the difference between FFO attributable to an equity investment and equity in earnings of an equity investee but excluding impairment charges on real estate assets, any gain or loss on sale of properties, as well as certain other adjustments currently not applicable to us. Our calculation of Normalized FFO differs from NAREIT's definition of FFO because we include the difference between FFO and Normalized FFO attributable to our equity investment in SIR, 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 ultimately be payable when all contingencies for determining any such fees are determined at the end of the calendar year and we exclude acquisition related costs, gains or losses on early extinguishment of debt, loss on impairment of SIR investment, gains or losses on issuance of shares by SIR and loss on distribution to common shareholders of RMR Inc. common stock. We consider FFO and Normalized FFO to be appropriate supplemental measures of operating performance for a REIT, along with net income (loss) and operating income. We believe that FFO and Normalized FFO provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense, FFO and Normalized FFO may facilitate a comparison of our operating performance between periods and with other REITs. FFO and Normalized FFO 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, our receipt of distributions from SIR and our expected needs and availability of cash to pay our obligations. FFO and Normalized FFO do not represent cash generated by operating activities in accordance with GAAP and should not be considered as alternatives to net income (loss) or operating income as an indicator of our operating performance or as a measure of our liquidity. These measures should be considered in conjunction with net income (loss) and operating income as presented in our Consolidated Statements of Comprehensive Income (Loss). Other REITs and real estate companies may calculate FFO and Normalized FFO differently than we do.
|
|
|
|
|
|
|
|
|
|
|
|
Acquired Properties
Results
(2)
|
|
Disposed Property Results
(3)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
|
|
Comparable Properties Results
(1)
|
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
Consolidated Results
|
||||||||||||||||||||||||||||||||||||||
|
|
|
Year Ended December 31,
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
%
|
||||||||||||||||||||||
|
|
|
2015
|
|
2014
|
|
Change
|
|
Change
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Change
|
|
Change
|
||||||||||||||||||||||
|
Rental income
|
|
$
|
227,699
|
|
|
$
|
229,996
|
|
|
$
|
(2,297
|
)
|
|
(1.0
|
%)
|
|
$
|
19,317
|
|
|
$
|
11,240
|
|
|
$
|
1,533
|
|
|
$
|
9,795
|
|
|
$
|
248,549
|
|
|
$
|
251,031
|
|
|
$
|
(2,482
|
)
|
|
(1.0
|
%)
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Real estate taxes
|
|
27,596
|
|
|
26,158
|
|
|
1,438
|
|
|
5.5
|
%
|
|
2,104
|
|
|
816
|
|
|
206
|
|
|
1,415
|
|
|
29,906
|
|
|
28,389
|
|
|
1,517
|
|
|
5.3
|
%
|
||||||||||
|
Utility expenses
|
|
17,417
|
|
|
18,254
|
|
|
(837
|
)
|
|
(4.6
|
%)
|
|
401
|
|
|
268
|
|
|
98
|
|
|
847
|
|
|
17,916
|
|
|
19,369
|
|
|
(1,453
|
)
|
|
(7.5
|
%)
|
||||||||||
|
Other operating expenses
|
|
46,835
|
|
|
42,908
|
|
|
3,927
|
|
|
9.2
|
%
|
|
3,249
|
|
|
1,586
|
|
|
341
|
|
|
1,488
|
|
|
50,425
|
|
|
45,982
|
|
|
4,443
|
|
|
9.7
|
%
|
||||||||||
|
Total operating expenses
|
|
91,848
|
|
|
87,320
|
|
|
4,528
|
|
|
5.2
|
%
|
|
5,754
|
|
|
2,670
|
|
|
645
|
|
|
3,750
|
|
|
98,247
|
|
|
93,740
|
|
|
4,507
|
|
|
4.8
|
%
|
||||||||||
|
Net operating income
(4)
|
|
$
|
135,851
|
|
|
$
|
142,676
|
|
|
$
|
(6,825
|
)
|
|
(4.8
|
%)
|
|
$
|
13,563
|
|
|
$
|
8,570
|
|
|
$
|
888
|
|
|
$
|
6,045
|
|
|
150,302
|
|
|
157,291
|
|
|
(6,989
|
)
|
|
(4.4
|
%)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Other expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Depreciation and amortization
|
|
|
|
|
|
68,696
|
|
|
66,593
|
|
|
2,103
|
|
|
3.2
|
%
|
||||||||||||||||||||||||||||||
|
Loss on impairment of real estate
|
|
|
|
|
|
—
|
|
|
2,016
|
|
|
(2,016
|
)
|
|
nm
|
|
||||||||||||||||||||||||||||||
|
Acquisition related costs
|
|
|
|
|
|
811
|
|
|
1,344
|
|
|
(533
|
)
|
|
(39.7
|
%)
|
||||||||||||||||||||||||||||||
|
General and administrative
|
|
|
|
|
|
14,826
|
|
|
15,809
|
|
|
(983
|
)
|
|
(6.2
|
%)
|
||||||||||||||||||||||||||||||
|
Total other expenses
|
|
|
|
|
|
84,333
|
|
|
85,762
|
|
|
(1,429
|
)
|
|
(1.7
|
%)
|
||||||||||||||||||||||||||||||
|
Operating income
|
|
|
|
|
|
65,969
|
|
|
71,529
|
|
|
(5,560
|
)
|
|
(7.8
|
%)
|
||||||||||||||||||||||||||||||
|
Dividend income
|
|
|
|
|
|
811
|
|
|
—
|
|
|
811
|
|
|
nm
|
|
||||||||||||||||||||||||||||||
|
Interest income
|
|
|
|
|
|
14
|
|
|
69
|
|
|
(55
|
)
|
|
(79.7
|
%)
|
||||||||||||||||||||||||||||||
|
Interest expense (including net amortization of debt premium and discounts and debt issuance costs of $1,376, and $1,310, respectively)
|
|
(37,008
|
)
|
|
(28,048
|
)
|
|
(8,960
|
)
|
|
31.9
|
%
|
||||||||||||||||||||||||||||||||||
|
Gain (loss) on early extinguishment of debt
|
|
34
|
|
|
(1,307
|
)
|
|
1,341
|
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Loss on distribution to common shareholders of The RMR Group Inc. common stock
|
|
(12,368
|
)
|
|
—
|
|
|
(12,368
|
)
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Loss on issuance of shares by Select Income REIT
|
|
(42,145
|
)
|
|
(53
|
)
|
|
(42,092
|
)
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Loss on impairment of Select Income REIT investment
|
|
(203,297
|
)
|
|
—
|
|
|
(203,297
|
)
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes and equity in earnings of investees
|
|
(227,990
|
)
|
|
42,190
|
|
|
(270,180
|
)
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Income tax expense
|
|
(86
|
)
|
|
(117
|
)
|
|
31
|
|
|
(26.5
|
%)
|
||||||||||||||||||||||||||||||||||
|
Equity in earnings of investees
|
|
18,640
|
|
|
10,963
|
|
|
7,677
|
|
|
70.0
|
%
|
||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations
|
|
(209,436
|
)
|
|
53,036
|
|
|
(262,472
|
)
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Income (loss) from discontinued operations
|
|
(525
|
)
|
|
3,498
|
|
|
(4,023
|
)
|
|
nm
|
|
||||||||||||||||||||||||||||||||||
|
Net income (loss)
|
|
$
|
(209,961
|
)
|
|
$
|
56,534
|
|
|
$
|
(266,495
|
)
|
|
nm
|
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Weighted average common shares outstanding (basic)
|
|
70,700
|
|
|
61,313
|
|
|
9,387
|
|
|
15.3
|
%
|
||||||||||||||||||||||||||||||||||
|
Weighted average common shares outstanding (diluted)
|
|
70,700
|
|
|
61,399
|
|
|
9,301
|
|
|
15.1
|
%
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Per common share amounts:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations (basic)
|
|
$
|
(2.96
|
)
|
|
$
|
0.87
|
|
|
$
|
(3.83
|
)
|
|
nm
|
|
|||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations (diluted)
|
|
$
|
(2.96
|
)
|
|
$
|
0.86
|
|
|
$
|
(3.82
|
)
|
|
nm
|
|
|||||||||||||||||||||||||||||||
|
Loss from discontinued operations (basic and diluted)
|
|
$
|
(0.01
|
)
|
|
$
|
0.06
|
|
|
$
|
(0.07
|
)
|
|
nm
|
|
|||||||||||||||||||||||||||||||
|
Net income (loss) (basic and diluted)
|
|
$
|
(2.97
|
)
|
|
$
|
0.92
|
|
|
$
|
(3.89
|
)
|
|
nm
|
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Calculation of Funds From Operations and Normalized Funds From Operations
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(209,961
|
)
|
|
$
|
56,534
|
|
|
|
|
|
|
||||||||||||
|
Plus: Depreciation and amortization
|
|
|
|
|
|
68,696
|
|
|
66,593
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Plus: Loss on impairment of real estate
|
|
|
|
|
|
—
|
|
|
2,016
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Plus: FFO attributable to Select Income REIT investment
|
|
|
|
|
|
56,105
|
|
|
24,677
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Less: Equity in earnings from Select Income REIT
|
|
|
|
|
|
(18,620
|
)
|
|
(10,876
|
)
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Less: Increase in carrying value of asset held for sale
|
|
|
|
|
|
—
|
|
|
(2,344
|
)
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Less: Net gain on sale of properties from discontinued operations
|
|
|
|
|
|
—
|
|
|
(774
|
)
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Funds from operations
|
|
|
|
|
|
(103,780
|
)
|
|
135,826
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Plus: Acquisition related costs
|
|
|
|
|
|
811
|
|
|
1,344
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Plus: Loss on early extinguishment of debt
|
|
|
|
|
|
—
|
|
|
1,307
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Plus: Loss on distribution to common shareholders of The RMR Group Inc. common stock
|
|
|
|
|
|
12,368
|
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Plus: Loss on issuance of shares by Select Income REIT
|
|
|
|
|
|
42,145
|
|
|
53
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Plus: Loss on impairment of Select Income REIT investment
|
|
|
|
|
|
203,297
|
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Plus: Normalized FFO attributable to Select Income REIT investment
|
|
|
|
|
|
70,012
|
|
|
26,898
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Less: FFO attributable to Select Income REIT investment
|
|
|
|
|
|
(56,105
|
)
|
|
(24,677
|
)
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Less: Gain on early extinguishment of debt
|
|
|
|
|
|
(34
|
)
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Normalized funds from operations
|
|
|
|
|
|
$
|
168,714
|
|
|
$
|
140,751
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Funds from operations per common share (basic)
|
|
|
|
|
|
$
|
(1.47
|
)
|
|
$
|
2.22
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Funds from operations per common share (diluted)
|
|
|
|
|
|
$
|
(1.47
|
)
|
|
$
|
2.21
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Normalized funds from operations per common share (basic)
|
|
|
|
|
|
$
|
2.39
|
|
|
$
|
2.30
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Normalized funds from operations per common share (diluted)
|
|
|
|
|
|
$
|
2.39
|
|
|
$
|
2.29
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
(1)
|
Comparable properties consist of 67 properties (86 buildings) we owned on December 31, 2015 and which we owned continuously since January 1, 2014, and excludes one property (one building) classified as discontinued operations.
|
|
(2)
|
Acquired properties consist of four properties (five buildings) we owned on December 31, 2015 and which we acquired during the period from January 1, 2014 to December 31, 2015.
|
|
(3)
|
Disposed property consists of one property (one building) we sold during the year ended December 31, 2015.
|
|
(4)
|
See footnote (4) on page 53 for the definition of NOI.
|
|
(5)
|
See footnote (5) on page 53 for the definition 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 at our properties;
|
|
•
|
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
|
|
•
|
our receipt of distributions from our investments in SIR and RMR Inc.
|
|
•
|
Our $300,000 term loan, which matures on March 31, 2020, is prepayable without penalty at any time. We are required to pay interest at LIBOR plus a premium, which was 140 basis points per annum at
December 31, 2016
, on the amount outstanding under our $300,000 term loan. The interest rate premium is subject to adjustment based upon changes to our credit ratings. As of
December 31, 2016
, the annual interest rate for the amount outstanding under our $300,000 term loan was
2.2%
.
|
|
•
|
Our $250,000 term loan, which matures on March 31, 2022, is prepayable without penalty at any time. We are required to pay interest at LIBOR plus a premium, which was 180 basis points per annum at
December 31, 2016
, on the amount outstanding under our $250,000 term loan. The interest rate premium is subject to adjustment based upon changes to our credit ratings. As of
December 31, 2016
, the annual interest rate for the amount outstanding under our $250,000 term loan was
2.6%
.
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
|
|
|
Less than
|
|
1-3
|
|
3-5
|
|
More than
|
||||||||||
|
Contractual Obligations
|
|
Total
|
|
1 Year
|
|
Years
|
|
Years
|
|
5 Years
|
||||||||||
|
Long term debt obligations
|
|
$
|
1,397,508
|
|
|
$
|
1,549
|
|
|
$
|
521,110
|
|
|
$
|
314,849
|
|
|
$
|
560,000
|
|
|
Tenant related obligations
(1)
|
|
41,814
|
|
|
37,556
|
|
|
1,799
|
|
|
957
|
|
|
1,502
|
|
|||||
|
Purchase obligations
(2)
|
|
15,230
|
|
|
15,230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Projected interest expense
(3)
|
|
582,380
|
|
|
49,434
|
|
|
90,310
|
|
|
52,496
|
|
|
390,140
|
|
|||||
|
Total
|
|
$
|
2,036,932
|
|
|
$
|
103,769
|
|
|
$
|
613,219
|
|
|
$
|
368,302
|
|
|
$
|
951,642
|
|
|
(1)
|
Committed tenant related obligations includes leasing commissions and tenant improvements and are based on leases in effect as of December 31, 2016 and the estimated cost to complete of
$15,355
to redevelop and expand an existing property prior to the commencement of the lease.
|
|
(2)
|
Represents the purchase price for a property located in Manassas, VA of
$13,200
we acquired in January 2017 and the
$2,030
purchase price for transferable development rights we agreed to acquire that would allow us to expand a property we own in Washington, D.C.
|
|
(3)
|
Projected interest expense is attributable to only our debt obligations at existing rates as of December 31, 2016 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 among various asset categories, including allocations to above and below market leases for properties qualifying as acquired businesses under FASB Accounting Standards Codification 805,
Business Combinations
, 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 and equity investments.
|
|
|
|
|
|
Annual
|
|
Annual
|
|
|
|
Interest
|
|||||
|
|
|
Principal
|
|
Interest
|
|
Interest
|
|
|
|
Payments
|
|||||
|
Debt
|
|
Balance
(1)
|
|
Rate
(1)
|
|
Expense
(1)
|
|
Maturity
|
|
Due
|
|||||
|
Senior unsecured notes
|
|
$
|
350,000
|
|
|
3.750
|
%
|
|
$
|
13,125
|
|
|
2019
|
|
Semi-annually
|
|
Senior unsecured notes
|
|
310,000
|
|
|
5.875
|
%
|
|
18,213
|
|
|
2046
|
|
Quarterly
|
||
|
Mortgage note
|
|
13,934
|
|
|
5.877
|
%
|
|
830
|
|
|
2021
|
|
Monthly
|
||
|
Mortgage note
|
|
8,484
|
|
|
7.000
|
%
|
|
602
|
|
|
2019
|
|
Monthly
|
||
|
Mortgage note
|
|
5,090
|
|
|
8.150
|
%
|
|
421
|
|
|
2021
|
|
Monthly
|
||
|
|
|
$
|
687,508
|
|
|
|
|
|
$
|
33,191
|
|
|
|
|
|
|
(1)
|
The principal balances and interest rates are the amounts determined pursuant to 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 our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
|
|
|
|
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, 2016
|
|
2.3
|
%
|
|
$
|
710,000
|
|
|
$
|
16,557
|
|
|
$
|
0.23
|
|
|
100 bps increase
|
|
3.3
|
%
|
|
$
|
710,000
|
|
|
$
|
23,755
|
|
|
$
|
0.33
|
|
|
(1)
|
Weighted based on the respective interest rates and outstanding borrowings under our revolving credit facility and term loans as of
December 31, 2016
.
|
|
(2)
|
Based on the weighted average shares outstanding (diluted) for the
year ended
December 31, 2016
.
|
|
|
|
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, 2016
|
|
2.1
|
%
|
|
$
|
1,300,000
|
|
|
$
|
27,679
|
|
|
$
|
0.39
|
|
|
100 bps increase
|
|
3.1
|
%
|
|
$
|
1,300,000
|
|
|
$
|
40,860
|
|
|
$
|
0.57
|
|
|
(1)
|
Weighted based on the respective interest rates and outstanding borrowings under our revolving credit facility (assuming fully drawn) and term loans as of
December 31, 2016
.
|
|
(2)
|
Based on the weighted average shares outstanding (diluted) for the
year ended
December 31, 2016
.
|
|
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 security holders—2009 Plan
|
|
None.
|
|
None.
|
|
1,554,105
(1)
|
|
Equity compensation plans not approved by security holders
|
|
None.
|
|
None.
|
|
None.
|
|
Total
|
|
None.
|
|
None.
|
|
1,554,105
(1)
|
|
(1)
|
Consists of common shares available for issuance pursuant to the terms of the 2009 Plan. Share awards that are forfeited
will be added to the common shares available for issuance under the 2009 Plan.
|
|
(a)
|
Index to Financial Statements and Financial Statement Schedules
|
|
(b)
|
Exhibits
|
|
Exhibit Number
|
|
Description
|
|
|
3.1
|
|
|
Composite Copy of Amended and Restated Declaration of Trust, dated June 8, 2009, as amended to date. (Incorporated by reference to the Company’s Current Report on Form 8-K dated July 28, 2014.)
|
|
3.2
|
|
|
Amended and Restated Bylaws of the Company, adopted September 7, 2016. (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 7, 2016.)
|
|
4.1
|
|
|
Form of Common Share Certificate. (Incorporated by reference to Amendment No. 2 to the Company’s Registration Statement on Form S-11/A, File No. 333-157455.)
|
|
4.2
|
|
|
Indenture, dated as of August 18, 2014, between the Company and U.S. Bank National Association. (Incorporated by reference to the Company’s Current Report on Form 8-K dated August 18, 2014.)
|
|
4.3
|
|
|
Supplemental Indenture No. 1, dated as of August 18, 2014, between the Company and U.S. Bank National Association, relating to the Company’s 3.75% Senior Notes due 2019, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K dated August 18, 2014.)
|
|
4.4
|
|
|
Supplemental Indenture No. 2, dated as of May 26, 2016, between the Company and U.S. Bank National Association, relating to the Company’s 5.875% Senior Notes due 2046, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K dated May 26, 2016.)
|
|
4.5
|
|
|
Authentication Order, dated June 22, 2016, from the Company to U.S. Bank National Association, relating to the Company's 5.875% Senior Notes due 2046. (Incorporated by reference to the Company’s Registration Statement on Form 8-A dated June 30, 2016.)
|
|
4.6
|
|
|
Registration Rights and Lock-Up Agreement, dated as of June 5, 2015, among the Company, ABP Trust, Barry M. Portnoy and Adam D. Portnoy. (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 5, 2015.)
|
|
8.1
|
|
|
Opinion of Sullivan & Worcester LLP as to certain tax matters. (Filed herewith.)
|
|
10.1
|
|
|
Transaction Agreement, dated as of June 5, 2015, among the Company, The RMR Group LLC (f/k/a Reit Management & Research LLC), ABP Trust (f/k/a Reit Management & Research Trust) and The RMR Group Inc. (f/k/a Reit Management & Research Inc.). (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 5, 2015.)
|
|
10.2
|
|
|
Second Amended and Restated Business Management Agreement, dated as of June 5, 2015, between the Company and The RMR Group LLC.(+) (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 5, 2015.)
|
|
10.3
|
|
|
Second Amended and Restated Property Management Agreement, dated as of June 5, 2015, between the Company and The RMR Group LLC.(+) (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 5, 2015.)
|
|
10.4
|
|
|
2009 Incentive Share Award Plan.(+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, File No. 001-34364.)
|
|
10.5
|
|
|
First Amendment to 2009 Incentive Share Award Plan.(+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015.)
|
|
10.6
|
|
|
Form of Share Award Agreement.(+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016.)
|
|
10.7
|
|
|
Form of Restricted Share Agreement.(+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015.)
|
|
10.8
|
|
|
Form of Restricted Share Agreement.(+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013.)
|
|
10.9
|
|
|
Form of Indemnification Agreement.(+) (Incorporated by reference to the Company’s Current Report on Form 8-K dated May 16, 2012.)
|
|
10.10
|
|
|
Summary of Trustee Compensation.(+) (Incorporated by reference to the Company’s Current Report on Form 8-K/A dated May 17, 2016.)
|
|
10.11
|
|
|
Credit Agreement, dated as of November 21, 2014, among the Company, Wells Fargo Bank, National Association, as Administrative Agent, and each of the other financial institutions initially a signatory thereto. (Incorporated by reference to the Company’s Current Report on Form 8-K dated November 21, 2014.)
|
|
10.12
|
|
|
Amended and Restated Shareholders Agreement, dated May 21, 2012, among Affiliates Insurance Company, Five Star Quality Care, Inc., Hospitality Properties Trust, Senior Housing Properties Trust, TravelCenters of America LLC, ABP Trust, the Company and Select Income REIT. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.)
|
|
10.13
|
|
|
Voting and Standstill Agreement, dated as of August 30, 2014, among Cole Corporate Income Trust, Inc., the Company and American Realty Capital Properties, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K dated August 30, 2014.)
|
|
10.14
|
|
|
Share Purchase Agreement, dated as of February 28, 2015, among the Company, Lakewood Capital Partners, LP, the other parties named therein and, for the purpose of specified sections, Select Income REIT. (Incorporated by reference to the Company’s Current Report on Form 8-K dated February 28, 2015.)
|
|
12.1
|
|
|
Computation of Ratio of Earnings to Fixed Charges. (Filed herewith.)
|
|
21.1
|
|
|
Subsidiaries of the Company. (Filed herewith.)
|
|
23.1
|
|
|
Consent of Ernst & Young LLP. (Filed herewith.)
|
|
23.2
|
|
|
Consent of Sullivan & Worcester LLP. (Contained in Exhibit 8.1.)
|
|
31.1
|
|
|
Rule 13a-14(a) Certification. (Filed herewith.)
|
|
31.2
|
|
|
Rule 13a-14(a) Certification. (Filed herewith.)
|
|
31.3
|
|
|
Rule 13a-14(a) Certification. (Filed herewith.)
|
|
31.4
|
|
|
Rule 13a-14(a) Certification. (Filed herewith.)
|
|
32.1
|
|
|
Section 1350 Certification. (Furnished herewith.)
|
|
99.1
|
|
|
Allocation Agreement, dated as of July 8, 2014, between the Company and The RMR Group LLC. (Incorporated by reference to the Company’s Current Report on Form 8-K dated July 8, 2014.)
|
|
99.2
|
|
|
Registration Rights Agreement, dated as of June 5, 2015, between the Company and The RMR Group Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 5, 2015.)
|
|
99.3
|
|
|
Audited Financial Statements as of December 31, 2016 for Select Income REIT. (Filed herewith.)
|
|
101.1
|
|
|
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 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
|
|
Boston, Massachusetts
February 22, 2017
|
|
|
|
|
|
|
/s/ Ernst & Young LLP
|
|
Boston, Massachusetts
February 22, 2017
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
ASSETS
|
|
|
|
||||
|
Real estate properties:
|
|
|
|
||||
|
Land
|
$
|
267,855
|
|
|
$
|
253,058
|
|
|
Buildings and improvements
|
1,620,905
|
|
|
1,443,074
|
|
||
|
Total real estate properties, gross
|
1,888,760
|
|
|
1,696,132
|
|
||
|
Accumulated depreciation
|
(296,804
|
)
|
|
(255,879
|
)
|
||
|
Total real estate properties, net
|
1,591,956
|
|
|
1,440,253
|
|
||
|
Equity investment in Select Income REIT
|
487,708
|
|
|
491,369
|
|
||
|
Assets of discontinued operations
|
12,541
|
|
|
12,468
|
|
||
|
Assets of property held for sale
|
—
|
|
|
3,098
|
|
||
|
Acquired real estate leases, net
|
124,848
|
|
|
118,267
|
|
||
|
Cash and cash equivalents
|
29,941
|
|
|
8,785
|
|
||
|
Restricted cash
|
530
|
|
|
1,022
|
|
||
|
Rents receivable, net
|
48,458
|
|
|
45,269
|
|
||
|
Deferred leasing costs, net
|
21,079
|
|
|
14,299
|
|
||
|
Other assets, net
|
68,005
|
|
|
33,680
|
|
||
|
Total assets
|
$
|
2,385,066
|
|
|
$
|
2,168,510
|
|
|
|
|
|
|
||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
|
Unsecured revolving credit facility
|
$
|
160,000
|
|
|
$
|
117,000
|
|
|
Unsecured term loans, net
|
547,171
|
|
|
546,490
|
|
||
|
Senior unsecured notes, net
|
646,844
|
|
|
345,809
|
|
||
|
Mortgage notes payable, net
|
27,837
|
|
|
136,299
|
|
||
|
Liabilities of discontinued operations
|
45
|
|
|
54
|
|
||
|
Liabilities of property held for sale
|
—
|
|
|
43
|
|
||
|
Accounts payable and other liabilities
|
54,019
|
|
|
50,543
|
|
||
|
Due to related persons
|
3,520
|
|
|
2,886
|
|
||
|
Assumed real estate lease obligations, net
|
10,626
|
|
|
12,735
|
|
||
|
Total liabilities
|
1,450,062
|
|
|
1,211,859
|
|
||
|
|
|
|
|
||||
|
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
|
||||
|
Shareholders’ equity:
|
|
|
|
||||
|
Common shares of beneficial interest, $.01 par value: 100,000,000 shares
|
|
|
|
||||
|
authorized, 71,177,906 and 71,126,308 shares issued and outstanding, respectively
|
712
|
|
|
711
|
|
||
|
Additional paid in capital
|
1,473,533
|
|
|
1,472,482
|
|
||
|
Cumulative net income
|
96,329
|
|
|
38,486
|
|
||
|
Cumulative other comprehensive income (loss)
|
26,957
|
|
|
(14,867
|
)
|
||
|
Cumulative common distributions
|
(662,527
|
)
|
|
(540,161
|
)
|
||
|
Total shareholders’ equity
|
935,004
|
|
|
956,651
|
|
||
|
Total liabilities and shareholders’ equity
|
$
|
2,385,066
|
|
|
$
|
2,168,510
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
||||||
|
Rental income
|
$
|
258,180
|
|
|
$
|
248,549
|
|
|
$
|
251,031
|
|
|
|
|
|
|
|
|
||||||
|
Expenses:
|
|
|
|
|
|
||||||
|
Real estate taxes
|
30,703
|
|
|
29,906
|
|
|
28,389
|
|
|||
|
Utility expenses
|
17,269
|
|
|
17,916
|
|
|
19,369
|
|
|||
|
Other operating expenses
|
54,290
|
|
|
50,425
|
|
|
45,982
|
|
|||
|
Depreciation and amortization
|
73,153
|
|
|
68,696
|
|
|
66,593
|
|
|||
|
Loss on impairment of real estate
|
—
|
|
|
—
|
|
|
2,016
|
|
|||
|
Acquisition related costs
|
1,191
|
|
|
811
|
|
|
1,344
|
|
|||
|
General and administrative
|
14,897
|
|
|
14,826
|
|
|
15,809
|
|
|||
|
Total expenses
|
191,503
|
|
|
182,580
|
|
|
179,502
|
|
|||
|
|
|
|
|
|
|
||||||
|
Operating income
|
66,677
|
|
|
65,969
|
|
|
71,529
|
|
|||
|
Dividend income
|
971
|
|
|
811
|
|
|
—
|
|
|||
|
Interest income
|
158
|
|
|
14
|
|
|
69
|
|
|||
|
Interest expense (including net amortization of debt premium and discounts
|
|
|
|
|
|
||||||
|
and debt issuance costs of $2,832, $1,376 and $1,310, respectively)
|
(45,060
|
)
|
|
(37,008
|
)
|
|
(28,048
|
)
|
|||
|
Gain (loss) on early extinguishment of debt
|
104
|
|
|
34
|
|
|
(1,307
|
)
|
|||
|
Loss on distribution to common shareholders of The RMR Group Inc. common stock
|
—
|
|
|
(12,368
|
)
|
|
—
|
|
|||
|
Net gain (loss) on issuance of shares by Select Income REIT
|
86
|
|
|
(42,145
|
)
|
|
(53
|
)
|
|||
|
Loss on impairment of Select Income REIT investment
|
—
|
|
|
(203,297
|
)
|
|
—
|
|
|||
|
Income (loss) from continuing operations before income taxes
|
|
|
|
|
|
||||||
|
and equity in earnings of investees
|
22,936
|
|
|
(227,990
|
)
|
|
42,190
|
|
|||
|
Income tax expense
|
(101
|
)
|
|
(86
|
)
|
|
(117
|
)
|
|||
|
Equity in earnings of investees
|
35,518
|
|
|
18,640
|
|
|
10,963
|
|
|||
|
Income (loss) from continuing operations
|
58,353
|
|
|
(209,436
|
)
|
|
53,036
|
|
|||
|
Income (loss) from discontinued operations
|
(589
|
)
|
|
(525
|
)
|
|
3,498
|
|
|||
|
Income (loss) before gain on sale of property
|
57,764
|
|
|
(209,961
|
)
|
|
56,534
|
|
|||
|
Gain on sale of property
|
79
|
|
|
—
|
|
|
—
|
|
|||
|
Net income (loss)
|
57,843
|
|
|
(209,961
|
)
|
|
56,534
|
|
|||
|
|
|
|
|
|
|
||||||
|
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
|
Unrealized gain (loss) on investment in available for sale securities
|
30,465
|
|
|
(9,391
|
)
|
|
—
|
|
|||
|
Equity in unrealized gain (loss) of investees
|
11,359
|
|
|
(5,513
|
)
|
|
(12
|
)
|
|||
|
Other comprehensive income (loss)
|
41,824
|
|
|
(14,904
|
)
|
|
(12
|
)
|
|||
|
Comprehensive income (loss)
|
$
|
99,667
|
|
|
$
|
(224,865
|
)
|
|
$
|
56,522
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average common shares outstanding (basic)
|
71,050
|
|
|
70,700
|
|
|
61,313
|
|
|||
|
Weighted average common shares outstanding (diluted)
|
71,071
|
|
|
70,700
|
|
|
61,399
|
|
|||
|
|
|
|
|
|
|
||||||
|
Per common share amounts:
|
|
|
|
|
|
||||||
|
Income (loss) from continuing operations (basic)
|
$
|
0.82
|
|
|
$
|
(2.96
|
)
|
|
$
|
0.87
|
|
|
Income (loss) from continuing operations (diluted)
|
$
|
0.82
|
|
|
$
|
(2.96
|
)
|
|
$
|
0.86
|
|
|
Income (loss) from discontinued operations (basic and diluted)
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.06
|
|
|
Net income (loss) (basic and diluted)
|
$
|
0.81
|
|
|
$
|
(2.97
|
)
|
|
$
|
0.92
|
|
|
|
Number of Shares
|
|
Common Shares
|
|
Additional Paid In Capital
|
|
Cumulative
Net
Income (Loss)
|
|
Cumulative
Other
Comprehensive
Income (Loss)
|
|
Cumulative
Common
Distributions
|
|
Total
|
|||||||||||||
|
Balance at December 31, 2013
|
54,722,018
|
|
|
$
|
547
|
|
|
$
|
1,105,679
|
|
|
$
|
191,913
|
|
|
$
|
49
|
|
|
$
|
(308,513
|
)
|
|
$
|
989,675
|
|
|
Issuance of shares, net
|
15,563,559
|
|
|
155
|
|
|
350,558
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350,713
|
|
||||||
|
Share grants
|
63,650
|
|
|
1
|
|
|
1,394
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,395
|
|
||||||
|
Equity in unrealized loss of investees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
||||||
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
56,534
|
|
|
—
|
|
|
—
|
|
|
56,534
|
|
||||||
|
Distributions to common shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100,856
|
)
|
|
(100,856
|
)
|
||||||
|
Balance at December 31, 2014
|
70,349,227
|
|
|
703
|
|
|
1,457,631
|
|
|
248,447
|
|
|
37
|
|
|
(409,369
|
)
|
|
1,297,449
|
|
||||||
|
Issuance of shares, net
|
723,222
|
|
|
7
|
|
|
14,039
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,046
|
|
||||||
|
Share grants
|
65,600
|
|
|
1
|
|
|
984
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
985
|
|
||||||
|
Share repurchases
|
(11,741
|
)
|
|
—
|
|
|
(172
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(172
|
)
|
||||||
|
Equity in unrealized loss of investees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,513
|
)
|
|
—
|
|
|
(5,513
|
)
|
||||||
|
Unrealized loss on investment in available for sale of securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,391
|
)
|
|
—
|
|
|
(9,391
|
)
|
||||||
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(209,961
|
)
|
|
—
|
|
|
—
|
|
|
(209,961
|
)
|
||||||
|
Distributions to common shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(130,792
|
)
|
|
(130,792
|
)
|
||||||
|
Balance at December 31, 2015
|
71,126,308
|
|
|
711
|
|
|
1,472,482
|
|
|
38,486
|
|
|
(14,867
|
)
|
|
(540,161
|
)
|
|
956,651
|
|
||||||
|
Share grants
|
65,900
|
|
|
1
|
|
|
1,388
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,389
|
|
||||||
|
Share repurchases
|
(14,302
|
)
|
|
—
|
|
|
(337
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(337
|
)
|
||||||
|
Equity in unrealized gain of investees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,359
|
|
|
—
|
|
|
11,359
|
|
||||||
|
Unrealized gain on investment in available for sale of securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,465
|
|
|
—
|
|
|
30,465
|
|
||||||
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
57,843
|
|
|
—
|
|
|
—
|
|
|
57,843
|
|
||||||
|
Distributions to common shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(122,366
|
)
|
|
(122,366
|
)
|
||||||
|
Balance at December 31, 2016
|
71,177,906
|
|
|
$
|
712
|
|
|
$
|
1,473,533
|
|
|
$
|
96,329
|
|
|
$
|
26,957
|
|
|
$
|
(662,527
|
)
|
|
$
|
935,004
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
|
Net income (loss)
|
$
|
57,843
|
|
|
$
|
(209,961
|
)
|
|
$
|
56,534
|
|
|
Adjustments to reconcile net income (loss) to cash provided by operating activities:
|
|
|
|
|
|
||||||
|
Depreciation
|
42,489
|
|
|
38,987
|
|
|
37,671
|
|
|||
|
Net amortization of debt premiums and discounts and debt issuance costs
|
2,832
|
|
|
1,376
|
|
|
1,310
|
|
|||
|
(Gain) loss on early extinguishment of debt
|
(104
|
)
|
|
(34
|
)
|
|
1,307
|
|
|||
|
Straight line rental income
|
(2,691
|
)
|
|
(3,978
|
)
|
|
(4,495
|
)
|
|||
|
Amortization of acquired real estate leases
|
29,003
|
|
|
28,624
|
|
|
27,713
|
|
|||
|
Amortization of deferred leasing costs
|
3,265
|
|
|
2,349
|
|
|
2,145
|
|
|||
|
Other non-cash expenses, net
|
284
|
|
|
817
|
|
|
2,181
|
|
|||
|
Loss on impairment of real estate
|
—
|
|
|
—
|
|
|
2,016
|
|
|||
|
Increase in carrying value of asset held for sale
|
—
|
|
|
—
|
|
|
(2,344
|
)
|
|||
|
Net gain on sale of properties
|
(79
|
)
|
|
—
|
|
|
(774
|
)
|
|||
|
Equity in earnings of investees
|
(35,518
|
)
|
|
(18,640
|
)
|
|
(10,963
|
)
|
|||
|
Net (gain) loss on issuance of shares by Select Income REIT
|
(86
|
)
|
|
42,145
|
|
|
53
|
|
|||
|
Loss on distribution to common shareholders of The RMR Group Inc. common stock
|
—
|
|
|
12,368
|
|
|
—
|
|
|||
|
Loss on impairment of Select Income REIT investment
|
—
|
|
|
203,297
|
|
|
—
|
|
|||
|
Distributions of earnings from Select Income REIT
|
32,425
|
|
|
21,882
|
|
|
17,046
|
|
|||
|
Change in assets and liabilities:
|
|
|
|
|
|
||||||
|
Restricted cash
|
492
|
|
|
1,258
|
|
|
(591
|
)
|
|||
|
Deferred leasing costs
|
(10,196
|
)
|
|
(4,741
|
)
|
|
(3,326
|
)
|
|||
|
Rents receivable
|
1,670
|
|
|
(2,729
|
)
|
|
(337
|
)
|
|||
|
Other assets
|
25
|
|
|
515
|
|
|
(419
|
)
|
|||
|
Accounts payable and accrued expenses
|
1,970
|
|
|
1,097
|
|
|
6,400
|
|
|||
|
Due to related persons
|
634
|
|
|
725
|
|
|
(402
|
)
|
|||
|
Net cash provided by operating activities
|
124,258
|
|
|
115,357
|
|
|
130,725
|
|
|||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
|
Real estate acquisitions and deposits
|
(200,331
|
)
|
|
—
|
|
|
(56,350
|
)
|
|||
|
Real estate improvements
|
(32,999
|
)
|
|
(19,163
|
)
|
|
(21,635
|
)
|
|||
|
Investment in Select Income REIT
|
—
|
|
|
(95,821
|
)
|
|
(689,969
|
)
|
|||
|
Investment in The RMR Group Inc.
|
—
|
|
|
(7,226
|
)
|
|
—
|
|
|||
|
Investment in Affiliates Insurance Company
|
—
|
|
|
—
|
|
|
(825
|
)
|
|||
|
Distributions in excess of earnings from Select Income REIT
|
17,910
|
|
|
25,148
|
|
|
3,594
|
|
|||
|
Proceeds from sale of properties, net
|
263
|
|
|
30,460
|
|
|
16,426
|
|
|||
|
Net cash used in investing activities
|
(215,157
|
)
|
|
(66,602
|
)
|
|
(748,759
|
)
|
|||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|||
|
Repayment of mortgage notes payable
|
(107,933
|
)
|
|
(48,908
|
)
|
|
(2,221
|
)
|
|||
|
Proceeds from issuance of common shares, net
|
—
|
|
|
—
|
|
|
349,787
|
|
|||
|
Proceeds from issuance of senior notes
|
310,000
|
|
|
—
|
|
|
347,217
|
|
|||
|
Proceeds from unsecured term loans
|
—
|
|
|
—
|
|
|
1,050,000
|
|
|||
|
Repayment of unsecured term loans
|
—
|
|
|
—
|
|
|
(850,000
|
)
|
|||
|
Borrowings on unsecured revolving credit facility
|
399,000
|
|
|
195,000
|
|
|
344,500
|
|
|||
|
Repayments on unsecured revolving credit facility
|
(356,000
|
)
|
|
(78,000
|
)
|
|
(501,500
|
)
|
|||
|
Payment of debt issuance costs
|
(10,309
|
)
|
|
(21
|
)
|
|
(12,765
|
)
|
|||
|
Repurchase of common shares
|
(337
|
)
|
|
(172
|
)
|
|
—
|
|
|||
|
Distributions to common shareholders
|
(122,366
|
)
|
|
(121,660
|
)
|
|
(100,856
|
)
|
|||
|
Net cash provided by (used in) financing activities
|
112,055
|
|
|
(53,761
|
)
|
|
624,162
|
|
|||
|
|
|
|
|
|
|
||||||
|
Increase (decrease) in cash and cash equivalents
|
21,156
|
|
|
(5,006
|
)
|
|
6,128
|
|
|||
|
Cash and cash equivalents at beginning of year
|
8,785
|
|
|
13,791
|
|
|
7,663
|
|
|||
|
Cash and cash equivalents at end of year
|
$
|
29,941
|
|
|
$
|
8,785
|
|
|
$
|
13,791
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
Supplemental cash flow information:
|
|
|
|
|
|
||||||
|
Interest paid
|
$
|
41,139
|
|
|
$
|
35,500
|
|
|
$
|
21,334
|
|
|
Income taxes paid
|
$
|
111
|
|
|
$
|
143
|
|
|
$
|
126
|
|
|
Non-cash investing activities:
|
|
|
|
|
|
||||||
|
Investment in The RMR Group Inc. paid in common shares
|
$
|
—
|
|
|
$
|
13,545
|
|
|
$
|
—
|
|
|
Sale of property
|
$
|
3,600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Mortgage note receivable related to sale of property
|
$
|
(3,600
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Real estate acquisition funded by the assumption of mortgage debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(97,524
|
)
|
|
Distribution of The RMR Group Inc. common stock received from Select Income REIT
|
$
|
—
|
|
|
$
|
5,244
|
|
|
$
|
—
|
|
|
Non-cash financing activities:
|
|
|
|
|
|
||||||
|
Assumption of mortgage debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
97,524
|
|
|
Distribution to common shareholders of The RMR Group Inc. common stock
|
$
|
—
|
|
|
$
|
(9,132
|
)
|
|
$
|
—
|
|
|
|
For the Year Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
|
Weighted average common shares for basic earnings per share
|
71,050
|
|
|
70,700
|
|
|
61,313
|
|
|
Effect of dilutive securities: unvested share awards
|
21
|
|
|
—
|
|
|
86
|
|
|
Weighted average common shares for diluted earnings per share
|
71,071
|
|
|
70,700
|
|
|
61,399
|
|
|
2017
|
$
|
242,867
|
|
|
2018
|
219,676
|
|
|
|
2019
|
190,106
|
|
|
|
2020
|
140,014
|
|
|
|
2021
|
118,815
|
|
|
|
Thereafter
|
364,419
|
|
|
|
|
$
|
1,275,897
|
|
|
|
|
|
|
|
|
Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
of
|
|
|
|
|
|
|
|
Buildings
|
|
Other
|
|
|
|
Acquired
|
|||||||||||||
|
Acquisition
|
|
|
|
|
|
Properties/
|
|
Square
|
|
Purchase
|
|
|
|
and
|
|
Assumed
|
|
Acquired
|
|
Lease
|
|||||||||||||
|
Date
|
|
Location
|
|
Type
|
|
Buildings
|
|
Feet
|
|
Price
(1)
|
|
Land
|
|
Improvements
|
|
Assets
|
|
Leases
|
|
Obligations
|
|||||||||||||
|
1/29/2016
|
|
Sacramento, CA
(2)
|
|
Office
|
|
1 / 1
|
|
337,811
|
|
|
$
|
79,235
|
|
|
$
|
4,688
|
|
|
$
|
61,722
|
|
|
$
|
2,167
|
|
|
$
|
11,245
|
|
|
$
|
(587
|
)
|
|
7/6/2016
|
|
Atlanta, GA
(3)
|
|
Land
|
|
—
|
|
—
|
|
|
1,670
|
|
|
1,670
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
12/20/2016
|
|
Rancho Cordova, CA
(2)(4)
|
|
Office
|
|
1 / 1
|
|
82,896
|
|
|
13,943
|
|
|
1,465
|
|
|
8,537
|
|
|
—
|
|
|
3,941
|
|
|
—
|
|
||||||
|
12/22/2016
|
|
Chantilly, VA
(2)(4)
|
|
Office
|
|
1 / 3
|
|
409,478
|
|
|
104,183
|
|
|
6,974
|
|
|
74,116
|
|
|
—
|
|
|
23,093
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
3 / 5
|
|
830,185
|
|
|
$
|
199,031
|
|
|
$
|
14,797
|
|
|
$
|
144,375
|
|
|
$
|
2,167
|
|
|
$
|
38,279
|
|
|
$
|
(587
|
)
|
|
(1)
|
Excludes acquisition costs.
|
|
(2)
|
Accounted for as a business combination.
|
|
(3)
|
On July 6, 2016, we acquired a land parcel adjacent to on our existing properties for
$1,623
. We accounted for this transaction as an asset acquisition and capitalized acquisition related costs of
$47
.
|
|
(4)
|
The allocation of the purchase price is based on preliminary estimates and may change upon the completion of (i) third party valuations and (ii) our analysis of acquired in place lease and land and building valuations.
|
|
|
|
December 31,
|
||
|
|
|
2015
|
||
|
Real estate properties, net
|
|
$
|
3,071
|
|
|
Rents receivable
|
|
1
|
|
|
|
Other assets
|
|
26
|
|
|
|
Assets of property held for sale
|
|
$
|
3,098
|
|
|
|
|
|
||
|
Other liabilities
|
|
$
|
43
|
|
|
Liabilities of property held for sale
|
|
$
|
43
|
|
|
|
|
December 31,
|
|
December 31,
|
||||
|
|
|
2016
|
|
2015
|
||||
|
Real estate properties, net
|
|
$
|
12,260
|
|
|
$
|
12,260
|
|
|
Other assets
|
|
281
|
|
|
208
|
|
||
|
Assets of discontinued operations
|
|
$
|
12,541
|
|
|
$
|
12,468
|
|
|
|
|
|
|
|
||||
|
Other liabilities
|
|
$
|
45
|
|
|
$
|
54
|
|
|
Liabilities of discontinued operations
|
|
$
|
45
|
|
|
$
|
54
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
Rental income
|
|
$
|
68
|
|
|
$
|
114
|
|
|
$
|
1,673
|
|
|
Real estate taxes
|
|
(97
|
)
|
|
(92
|
)
|
|
(427
|
)
|
|||
|
Utility expenses
|
|
(146
|
)
|
|
(161
|
)
|
|
(226
|
)
|
|||
|
Other operating expenses
|
|
(300
|
)
|
|
(272
|
)
|
|
(459
|
)
|
|||
|
General and administrative
|
|
(114
|
)
|
|
(114
|
)
|
|
(181
|
)
|
|||
|
Increase in carrying value of asset held for sale
|
|
—
|
|
|
—
|
|
|
2,344
|
|
|||
|
Net gain on sale of properties
|
|
—
|
|
|
—
|
|
|
774
|
|
|||
|
Income (loss) from discontinued operations
|
|
$
|
(589
|
)
|
|
$
|
(525
|
)
|
|
$
|
3,498
|
|
|
•
|
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 applicable 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 Fee. The incentive 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 measurement period, and
|
|
▪
|
the amount (expressed as a percentage) by which the total returns per share realized by our common shareholders (i.e., share price appreciation plus dividends) exceeds the total shareholder return of the SNL U.S. REIT Equity Index (in each case subject to certain adjustments) for the relevant measurement period.
|
|
◦
|
The measurement periods are generally
three
year periods ending with the year for which the incentive fee is being calculated, with shorter periods applicable in the case of the calculation of the incentive fee for 2015 (
two years
) and 2014 (
one year
).
|
|
◦
|
The benchmark return per share is adjusted if our total return per share exceeds
12%
per year in any measurement period and, generally, no incentive management fee is payable by us unless our total return per share during the measurement period is positive.
|
|
◦
|
The incentive management fee is subject to a cap equal to the value of
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.
|
|
◦
|
If our financial statements 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, for one or more periods in respect of which RMR LLC received an incentive management fee, the incentive management fee payable with respect to periods for which there has been a restatement shall be recalculated by, and approved by a majority vote of, our Independent Trustees, and RMR LLC may be required to pay us an amount equal to the value in excess of that which RMR LLC would have received based upon the incentive management fee as recalculated, either in cash or our common shares.
|
|
•
|
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.
|
|
•
|
We contributed
700,000
of our common shares and
$3,917
in cash to RMR Inc. and RMR Inc. issued
1,541,201
shares of its class A common stock to us.
|
|
•
|
We agreed to distribute approximately half of the shares of class A common stock of RMR Inc. issued to us in the Up-C Transaction to our shareholders as a special distribution.
|
|
•
|
We entered into amended and restated business and property management agreements with RMR LLC which, among other things, amended the term, termination and termination fee provisions of those agreements. See Note 6 for further information regarding our management agreements with RMR LLC.
|
|
•
|
We entered into a registration rights agreement with RMR Inc. covering the shares of class A common stock of RMR Inc. issued to us in the Up-C Transaction, pursuant to which we received demand and piggyback registration rights, subject to certain limitations.
|
|
•
|
We entered into a lock up and registration rights agreement with ABP Trust, Adam Portnoy and Barry Portnoy pursuant to which they agreed not to transfer the
700,000
of our common shares ABP Trust received in the Up-C Transaction for a
10
year period ending on June 5, 2025 and we granted them certain registration rights, subject, in each case, to certain exceptions.
|
|
Year
|
|
Principal payment
|
|
|
|
|
2017
|
|
$
|
1,549
|
|
|
|
2018
|
|
1,671
|
|
|
|
|
2019
|
|
519,439
|
|
|
|
|
2020
|
|
301,619
|
|
|
|
|
2021
|
|
13,230
|
|
|
|
|
Thereafter
|
|
560,000
|
|
|
|
|
|
|
$
|
1,397,508
|
|
(1)
|
|
|
|
|
|
||
|
(1)
|
Total debt outstanding as of
December 31, 2016
, net of unamortized premiums, discounts and certain issuance costs totaling
$15,656
was
$1,381,852
.
|
|
|
|
|
|
Fair Value at Reporting Date Using
|
||||||||||||
|
|
|
|
|
Quoted Prices in
|
|
|
|
Significant
|
||||||||
|
|
|
Estimated
|
|
Active Markets for
|
|
Significant Other
|
|
Unobservable
|
||||||||
|
|
|
Fair
|
|
Identical Assets
|
|
Observable Inputs
|
|
Inputs
|
||||||||
|
Description
|
|
Value
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
|
Recurring Fair Value Measurement Assets:
|
|
|
|
|
|
|
|
|
||||||||
|
Investment in RMR Inc.
(1)
|
|
$
|
47,962
|
|
|
$
|
47,962
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Non-Recurring Fair Value Measurement Assets:
|
|
|
|
|
|
|
|
|
|
|||||||
|
Property held for sale and classified as discontinued operations
(2)
|
|
$
|
12,260
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,260
|
|
|
(1)
|
Our
1,214,225
shares of class A common stock of RMR Inc., which are included in other assets in our consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs). Our historical cost basis for these shares is
$26,888
as of
December 31, 2016
. The unrealized gain of
$21,074
for these shares as of
December 31, 2016
is included in cumulative other comprehensive income (loss) in our consolidated balance sheets.
|
|
(2)
|
We estimated the fair value of this property at
December 31, 2016
based upon broker estimates of value less estimated sale costs (Level 3 inputs as defined in the fair value hierarchy under GAAP).
|
|
|
|
As of December 31, 2016
|
|
As of December 31, 2015
|
||||||||||||
|
|
|
Carrying Amount
(1)
|
|
Fair Value
|
|
Carrying Amount
(1)
|
|
Fair Value
|
||||||||
|
Senior unsecured notes, 3.75% interest rate, due in 2019
|
|
$
|
346,952
|
|
|
$
|
354,078
|
|
|
$
|
345,809
|
|
|
$
|
351,692
|
|
|
Senior unsecured notes, 5.875% interest rate, due in 2046
|
|
299,892
|
|
|
292,268
|
|
|
—
|
|
|
—
|
|
||||
|
Mortgage note payable, 6.21% interest rate, due in 2016
(2) (3)
|
|
—
|
|
|
—
|
|
|
23,476
|
|
|
24,038
|
|
||||
|
Mortgage note payable, 5.55% interest rate, due in 2016
(2) (4)
|
|
—
|
|
|
—
|
|
|
83,375
|
|
|
83,457
|
|
||||
|
Mortgage note payable, 5.88% interest rate, due in 2021
(2)
|
|
13,841
|
|
|
14,492
|
|
|
14,045
|
|
|
14,678
|
|
||||
|
Mortgage note payable, 7.00% interest rate, due in 2019
(2)
|
|
8,778
|
|
|
9,188
|
|
|
9,145
|
|
|
9,645
|
|
||||
|
Mortgage note payable, 8.15% interest rate, due in 2021
(2)
|
|
5,218
|
|
|
5,575
|
|
|
6,258
|
|
|
6,711
|
|
||||
|
|
|
$
|
674,681
|
|
|
$
|
675,601
|
|
|
$
|
482,108
|
|
|
$
|
490,221
|
|
|
(1)
|
Carrying amount includes certain unamortized debt issuance costs and unamortized premiums and discounts.
|
|
(2)
|
We assumed these mortgages 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 date of acquisition and we are amortizing the fair value premiums, if any, to interest expense over the respective terms of the mortgages to reduce interest expense to the estimated market interest rates as of the date of acquisition.
|
|
(3)
|
This mortgage note was repaid, at par, in February 2016.
|
|
(4)
|
This mortgage note was repaid, at par, in March 2016.
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||
|
|
|
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 shares, beginning of year
|
|
96,725
|
|
|
$20.11
|
|
90,338
|
|
|
$23.40
|
|
85,451
|
|
|
$23.71
|
|
Shares granted
|
|
65,900
|
|
|
21.66
|
|
65,600
|
|
|
16.59
|
|
63,650
|
|
|
23.70
|
|
Shared forfeited or repurchased
|
|
—
|
|
|
—
|
|
(1,020
|
)
|
|
23.41
|
|
—
|
|
|
—
|
|
Shares vested
|
|
(63,655
|
)
|
|
20.97
|
|
(58,193
|
)
|
|
21.20
|
|
(58,763
|
)
|
|
24.17
|
|
Unvested shares, end of year
|
|
98,970
|
|
|
$20.59
|
|
96,725
|
|
|
$20.11
|
|
90,338
|
|
|
$23.40
|
|
|
Unrealized Gain (Loss)
on Investment in
Available for
Sale Securities
|
|
Equity in
Unrealized Gains
(Losses) of
Investees
|
|
Total
|
||||||
|
Balance at December 31, 2013
|
$
|
—
|
|
|
$
|
49
|
|
|
$
|
49
|
|
|
Other comprehensive loss before reclassifications
|
—
|
|
|
37
|
|
|
37
|
|
|||
|
Amounts reclassified from cumulative other
|
|
|
|
|
|
||||||
|
comprehensive loss to net income
(1)
|
—
|
|
|
(49
|
)
|
|
(49
|
)
|
|||
|
Net current period other comprehensive loss
|
—
|
|
|
(12
|
)
|
|
(12
|
)
|
|||
|
Balance at December 31, 2014
|
—
|
|
|
37
|
|
|
37
|
|
|||
|
Other comprehensive loss before reclassifications
|
(9,391
|
)
|
|
(5,592
|
)
|
|
(14,983
|
)
|
|||
|
Amounts reclassified from cumulative other
|
|
|
|
|
|
||||||
|
comprehensive loss to net income
(1)
|
—
|
|
|
79
|
|
|
79
|
|
|||
|
Net current period other comprehensive loss
|
(9,391
|
)
|
|
(5,513
|
)
|
|
(14,904
|
)
|
|||
|
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
(1)
|
—
|
|
|
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
|
|
|
(1)
|
Amounts reclassified from cumulative other comprehensive income (loss) is included in equity in earnings of investees in our consolidated statements of comprehensive income (loss).
|
|
|
|
December 31,
|
|
December 31,
|
||||
|
|
|
2016
|
|
2015
|
||||
|
Real estate properties, net
|
|
$
|
3,899,792
|
|
|
$
|
3,954,889
|
|
|
Acquired real estate leases, net
|
|
506,298
|
|
|
566,195
|
|
||
|
Cash and cash equivalents
|
|
22,127
|
|
|
17,876
|
|
||
|
Rents receivable, net
|
|
124,089
|
|
|
99,307
|
|
||
|
Other assets, net
|
|
87,376
|
|
|
46,078
|
|
||
|
Total assets
|
|
$
|
4,639,682
|
|
|
$
|
4,684,345
|
|
|
|
|
|
|
|
||||
|
Unsecured revolving credit facility
|
|
$
|
327,000
|
|
|
$
|
303,000
|
|
|
Unsecured term loan, net
|
|
348,373
|
|
|
347,876
|
|
||
|
Senior unsecured notes, net
|
|
1,430,300
|
|
|
1,426,025
|
|
||
|
Mortgage notes payable, net
|
|
245,643
|
|
|
286,706
|
|
||
|
Assumed real estate lease obligations, net
|
|
77,622
|
|
|
86,495
|
|
||
|
Other liabilities
|
|
136,782
|
|
|
137,283
|
|
||
|
Shareholders' equity
|
|
2,073,962
|
|
|
2,096,960
|
|
||
|
Total liabilities and shareholders' equity
|
|
$
|
4,639,682
|
|
|
$
|
4,684,345
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
Rental income
|
|
$
|
387,015
|
|
|
$
|
364,139
|
|
|
$
|
189,743
|
|
|
Tenant reimbursements and other income
|
|
74,992
|
|
|
64,226
|
|
|
32,937
|
|
|||
|
Total revenues
|
|
462,007
|
|
|
428,365
|
|
|
222,680
|
|
|||
|
Real estate taxes
|
|
42,879
|
|
|
37,460
|
|
|
22,202
|
|
|||
|
Other operating expenses
|
|
52,957
|
|
|
41,953
|
|
|
18,597
|
|
|||
|
Depreciation and amortization
|
|
133,762
|
|
|
122,906
|
|
|
41,054
|
|
|||
|
Acquisition related costs
|
|
306
|
|
|
21,987
|
|
|
7,348
|
|
|||
|
General and administrative
|
|
28,602
|
|
|
25,859
|
|
|
14,881
|
|
|||
|
Loss on asset impairment
|
|
5,484
|
|
|
—
|
|
|
—
|
|
|||
|
Total expenses
|
|
263,990
|
|
|
250,165
|
|
|
104,082
|
|
|||
|
Operating income
|
|
198,017
|
|
|
178,200
|
|
|
118,598
|
|
|||
|
Dividend income
|
|
1,268
|
|
|
1,666
|
|
|
—
|
|
|||
|
Interest expense
|
|
(82,620
|
)
|
|
(73,885
|
)
|
|
(12,974
|
)
|
|||
|
Gain (loss) on early extinguishment of debt
|
|
—
|
|
|
(6,845
|
)
|
|
243
|
|
|||
|
Loss on distribution of The RMR Group Inc. common stock
|
|
—
|
|
|
(23,717
|
)
|
|
—
|
|
|||
|
Income before income tax expense and equity in earnings of an investee and gain on sale of property
|
|
116,665
|
|
|
75,419
|
|
|
105,867
|
|
|||
|
Income tax expense
|
|
(448
|
)
|
|
(515
|
)
|
|
(175
|
)
|
|||
|
Equity in earnings of an investee
|
|
137
|
|
|
20
|
|
|
87
|
|
|||
|
Net income before gain on sale of property
|
|
116,354
|
|
|
74,924
|
|
|
105,779
|
|
|||
|
Gain on sale of property
|
|
—
|
|
|
—
|
|
|
116
|
|
|||
|
Net income
|
|
116,354
|
|
|
74,924
|
|
|
105,895
|
|
|||
|
Net income allocated to noncontrolling interest
|
|
(33
|
)
|
|
(176
|
)
|
|
—
|
|
|||
|
Net income attributed to SIR
|
|
$
|
116,321
|
|
|
$
|
74,748
|
|
|
$
|
105,895
|
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average common shares outstanding (basic)
|
|
89,304
|
|
|
86,699
|
|
|
55,964
|
|
|||
|
Weighted average common shares outstanding (diluted)
|
|
89,324
|
|
|
86,708
|
|
|
56,035
|
|
|||
|
Net income attributed to SIR per common share (basic and diluted)
|
|
$
|
1.30
|
|
|
$
|
0.86
|
|
|
$
|
1.89
|
|
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
|
Investment
in Real Estate
|
|
Investment
in SIR
|
|
Corporate
|
|
Consolidated
|
||||||||
|
Rental income
|
$
|
258,180
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
258,180
|
|
|
Expenses:
|
|
|
|
|
|
|
|
||||||||
|
Real estate taxes
|
30,703
|
|
|
—
|
|
|
—
|
|
|
30,703
|
|
||||
|
Utility expenses
|
17,269
|
|
|
—
|
|
|
—
|
|
|
17,269
|
|
||||
|
Other operating expenses
|
54,290
|
|
|
—
|
|
|
—
|
|
|
54,290
|
|
||||
|
Depreciation and amortization
|
73,153
|
|
|
—
|
|
|
—
|
|
|
73,153
|
|
||||
|
Acquisition related costs
|
1,191
|
|
|
—
|
|
|
—
|
|
|
1,191
|
|
||||
|
General and administrative
|
—
|
|
|
—
|
|
|
14,897
|
|
|
14,897
|
|
||||
|
Total expenses
|
176,606
|
|
|
—
|
|
|
14,897
|
|
|
191,503
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Operating income (loss)
|
81,574
|
|
|
—
|
|
|
(14,897
|
)
|
|
66,677
|
|
||||
|
Dividend income
|
—
|
|
|
—
|
|
|
971
|
|
|
971
|
|
||||
|
Interest income
|
124
|
|
|
—
|
|
|
34
|
|
|
158
|
|
||||
|
Interest expense
|
(2,375
|
)
|
|
—
|
|
|
(42,685
|
)
|
|
(45,060
|
)
|
||||
|
Gain on early extinguishment of debt
|
104
|
|
|
—
|
|
|
—
|
|
|
104
|
|
||||
|
Net gain on issuance of shares by Select Income REIT
|
—
|
|
|
86
|
|
|
—
|
|
|
86
|
|
||||
|
Income (loss) from continuing operations before income taxes and
|
|
|
|
|
|
|
|
||||||||
|
equity in earnings (losses) of investees
|
79,427
|
|
|
86
|
|
|
(56,577
|
)
|
|
22,936
|
|
||||
|
Income tax expense
|
—
|
|
|
—
|
|
|
(101
|
)
|
|
(101
|
)
|
||||
|
Equity in earnings of investees
|
—
|
|
|
35,381
|
|
|
137
|
|
|
35,518
|
|
||||
|
Income (loss) from continuing operations
|
79,427
|
|
|
35,467
|
|
|
(56,541
|
)
|
|
58,353
|
|
||||
|
Loss from discontinued operations
|
(589
|
)
|
|
—
|
|
|
—
|
|
|
(589
|
)
|
||||
|
Income (loss) before gain on sale of property
|
78,838
|
|
|
35,467
|
|
|
(56,541
|
)
|
|
57,764
|
|
||||
|
Gain on sale of property
|
79
|
|
|
—
|
|
|
—
|
|
|
79
|
|
||||
|
Net income (loss)
|
$
|
78,917
|
|
|
$
|
35,467
|
|
|
$
|
(56,541
|
)
|
|
$
|
57,843
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
As of December 31, 2016
|
||||||||||||||
|
|
Investment
in Real Estate
|
|
Investment
in SIR
|
|
Corporate
|
|
Consolidated
|
||||||||
|
Total Assets
|
$
|
1,807,560
|
|
|
$
|
487,708
|
|
|
$
|
89,798
|
|
|
$
|
2,385,066
|
|
|
|
Year Ended December 31, 2015
|
||||||||||||||
|
|
Investment
in Real Estate
|
|
Investment
in SIR
|
|
Corporate
|
|
Consolidated
|
||||||||
|
Rental income
|
$
|
248,549
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
248,549
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Expenses:
|
|
|
|
|
|
|
|
||||||||
|
Real estate taxes
|
29,906
|
|
|
—
|
|
|
—
|
|
|
29,906
|
|
||||
|
Utility expenses
|
17,916
|
|
|
—
|
|
|
—
|
|
|
17,916
|
|
||||
|
Other operating expenses
|
50,425
|
|
|
—
|
|
|
—
|
|
|
50,425
|
|
||||
|
Depreciation and amortization
|
68,696
|
|
|
—
|
|
|
—
|
|
|
68,696
|
|
||||
|
Acquisition related costs
|
561
|
|
|
—
|
|
|
250
|
|
|
811
|
|
||||
|
General and administrative
|
—
|
|
|
—
|
|
|
14,826
|
|
|
14,826
|
|
||||
|
Total expenses
|
167,504
|
|
|
—
|
|
|
15,076
|
|
|
182,580
|
|
||||
|
Operating income (loss)
|
81,045
|
|
|
—
|
|
|
(15,076
|
)
|
|
65,969
|
|
||||
|
Dividend income
|
—
|
|
|
—
|
|
|
811
|
|
|
811
|
|
||||
|
Interest income
|
10
|
|
|
—
|
|
|
4
|
|
|
14
|
|
||||
|
Interest expense
|
(7,908
|
)
|
|
—
|
|
|
(29,100
|
)
|
|
(37,008
|
)
|
||||
|
Gain on early extinguishment of debt
|
34
|
|
|
—
|
|
|
—
|
|
|
34
|
|
||||
|
Loss on distribution to common shareholders of The RMR Group Inc. common stock
|
—
|
|
|
—
|
|
|
(12,368
|
)
|
|
(12,368
|
)
|
||||
|
Net loss on issuance of shares by Select Income REIT
|
—
|
|
|
(42,145
|
)
|
|
—
|
|
|
(42,145
|
)
|
||||
|
Loss on impairment of Select Income REIT investment
|
—
|
|
|
(203,297
|
)
|
|
—
|
|
|
(203,297
|
)
|
||||
|
Income (loss) from continuing operations before income taxes and
|
|
|
|
|
|
|
|
||||||||
|
equity in earnings of investees
|
73,181
|
|
|
(245,442
|
)
|
|
(55,729
|
)
|
|
(227,990
|
)
|
||||
|
Income tax expense
|
—
|
|
|
—
|
|
|
(86
|
)
|
|
(86
|
)
|
||||
|
Equity in earnings of investees
|
—
|
|
|
18,620
|
|
|
20
|
|
|
18,640
|
|
||||
|
Income (loss) from continuing operations
|
73,181
|
|
|
(226,822
|
)
|
|
(55,795
|
)
|
|
(209,436
|
)
|
||||
|
Loss from discontinued operations
|
(525
|
)
|
|
—
|
|
|
—
|
|
|
(525
|
)
|
||||
|
Net income (loss)
|
$
|
72,656
|
|
|
$
|
(226,822
|
)
|
|
$
|
(55,795
|
)
|
|
$
|
(209,961
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
As of December 31, 2015
|
||||||||||||||
|
|
Investment
in Real Estate
|
|
Investment
in SIR
|
|
Corporate
|
|
Consolidated
|
||||||||
|
Total Assets
|
$
|
1,639,462
|
|
|
$
|
491,369
|
|
|
$
|
37,679
|
|
|
$
|
2,168,510
|
|
|
|
|
Year ended December 31, 2014
|
||||||||||||||
|
|
|
Investment
|
|
Investment
|
|
|
|
|
||||||||
|
|
|
in Real Estate
|
|
in SIR
|
|
Corporate
|
|
Consolidated
|
||||||||
|
Rental income
|
|
$
|
251,031
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
251,031
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
||||||||
|
Real estate taxes
|
|
28,389
|
|
|
—
|
|
|
—
|
|
|
28,389
|
|
||||
|
Utility expenses
|
|
19,369
|
|
|
—
|
|
|
—
|
|
|
19,369
|
|
||||
|
Other operating expenses
|
|
45,982
|
|
|
—
|
|
|
—
|
|
|
45,982
|
|
||||
|
Depreciation and amortization
|
|
66,593
|
|
|
—
|
|
|
—
|
|
|
66,593
|
|
||||
|
Loss on impairment of real estate
|
|
2,016
|
|
|
—
|
|
|
—
|
|
|
2,016
|
|
||||
|
Acquisition related costs
|
|
1,344
|
|
|
—
|
|
|
—
|
|
|
1,344
|
|
||||
|
General and administrative
|
|
—
|
|
|
—
|
|
|
15,809
|
|
|
15,809
|
|
||||
|
Total expenses
|
|
163,693
|
|
|
—
|
|
|
15,809
|
|
|
179,502
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating income (loss)
|
|
87,338
|
|
|
—
|
|
|
(15,809
|
)
|
|
71,529
|
|
||||
|
Interest and other income
|
|
—
|
|
|
—
|
|
|
69
|
|
|
69
|
|
||||
|
Interest expense
|
|
(7,820
|
)
|
|
—
|
|
|
(20,228
|
)
|
|
(28,048
|
)
|
||||
|
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(1,307
|
)
|
|
(1,307
|
)
|
||||
|
Loss on issuance of shares by Select Income REIT
|
|
—
|
|
|
(53
|
)
|
|
|
|
(53
|
)
|
|||||
|
Income (loss) from continuing operations before income taxes and
|
|
|
|
|
|
|
|
|
||||||||
|
equity in earnings of investees
|
|
79,518
|
|
|
(53
|
)
|
|
(37,275
|
)
|
|
42,190
|
|
||||
|
Income tax expense
|
|
—
|
|
|
—
|
|
|
(117
|
)
|
|
(117
|
)
|
||||
|
Equity in earnings of investees
|
|
—
|
|
|
10,876
|
|
|
87
|
|
|
10,963
|
|
||||
|
Income (loss) from continuing operations
|
|
79,518
|
|
|
10,823
|
|
|
(37,305
|
)
|
|
53,036
|
|
||||
|
Income from discontinued operations
|
|
3,498
|
|
|
—
|
|
|
—
|
|
|
3,498
|
|
||||
|
Net income (loss)
|
|
$
|
83,016
|
|
|
$
|
10,823
|
|
|
$
|
(37,305
|
)
|
|
$
|
56,534
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
As of December 31, 2014
|
||||||||||||||
|
|
|
Investment
|
|
Investment
|
|
|
|
|
||||||||
|
|
|
in Real Estate
|
|
in SIR
|
|
Corporate
|
|
Consolidated
|
||||||||
|
Total Assets
|
|
$
|
1,713,361
|
|
|
$
|
680,137
|
|
|
$
|
26,410
|
|
|
$
|
2,419,908
|
|
|
|
2016
|
||||||||||||||
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
|
Rental income
|
$
|
63,611
|
|
|
$
|
64,061
|
|
|
$
|
64,478
|
|
|
$
|
66,030
|
|
|
Net income
|
17,387
|
|
|
16,813
|
|
|
11,578
|
|
|
12,065
|
|
||||
|
Net income per common share (basic and diluted)
|
0.24
|
|
|
0.24
|
|
|
0.16
|
|
|
0.17
|
|
||||
|
Common distributions declared
|
0.43
|
|
|
0.43
|
|
|
0.43
|
|
|
0.43
|
|
||||
|
|
2015
|
||||||||||||||
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
|
Rental income
|
$
|
62,659
|
|
|
$
|
62,113
|
|
|
$
|
62,092
|
|
|
$
|
61,685
|
|
|
Net income (loss)
|
(33,370
|
)
|
|
(191,163
|
)
|
|
16,911
|
|
|
(2,339
|
)
|
||||
|
Net income (loss) per common share (basic and diluted)
|
(0.47
|
)
|
|
(2.71
|
)
|
|
0.24
|
|
|
(0.03
|
)
|
||||
|
Common distributions declared
(1)
|
0.43
|
|
|
0.43
|
|
|
0.43
|
|
|
0.56
|
|
||||
|
(1)
|
The fourth quarter of
2015
includes a non-cash distribution of
$0.13
per share related to the distribution of RMR Inc. shares to our shareholders on December 14, 2015.
|
|
|
|
|
|
|
|
|
Initial Cost to Company
|
|
Costs Capitalized Subsequent to Acquisition
|
|
|
|
Cost amount carried at Close of Period
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
Property
|
|
Location
|
|
Encumbrances
|
|
Land
|
|
Buildings
and Equipment |
|
|
Impairments/
Writedowns |
|
Land
|
|
Buildings
and Equipment |
|
Total
(1)(2)
|
|
Accumulated
Depreciation (3) |
|
Date(s)
Acquired |
|
Original
Construction Date(s) |
|||||||||||||||||||
|
1
|
131 Clayton Street
|
|
Montgomery, AL
|
|
$
|
—
|
|
|
$
|
920
|
|
|
$
|
9,084
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
920
|
|
|
$
|
9,100
|
|
|
$
|
10,020
|
|
|
$
|
(1,251
|
)
|
|
6/22/2011
|
|
2007
|
|
2
|
4344 Carmichael Road
|
|
Montgomery, AL
|
|
—
|
|
|
1,374
|
|
|
11,658
|
|
|
—
|
|
|
—
|
|
|
1,374
|
|
|
11,658
|
|
|
13,032
|
|
|
(874
|
)
|
|
12/17/2013
|
|
2009
|
|||||||||
|
3
|
15451 North 28th Avenue
|
|
Phoenix, AZ
|
|
—
|
|
|
1,917
|
|
|
7,416
|
|
|
67
|
|
|
—
|
|
|
1,917
|
|
|
7,483
|
|
|
9,400
|
|
|
(434
|
)
|
|
9/10/2014
|
|
1996
|
|||||||||
|
4
|
711 14th Avenue
|
|
Safford, AZ
|
|
—
|
|
|
460
|
|
|
11,708
|
|
|
265
|
|
|
—
|
|
|
460
|
|
|
11,973
|
|
|
12,433
|
|
|
(1,924
|
)
|
|
6/16/2010
|
|
1992
|
|||||||||
|
5
|
5045 East Butler Street
|
|
Fresno, CA
|
|
—
|
|
|
7,277
|
|
|
61,118
|
|
|
58
|
|
|
—
|
|
|
7,277
|
|
|
61,175
|
|
|
68,452
|
|
|
(21,968
|
)
|
|
8/29/2002
|
|
1971
|
|||||||||
|
6
|
10949 N. Mather Boulevard
|
|
Rancho Cordova, CA
|
|
—
|
|
|
562
|
|
|
16,923
|
|
|
100
|
|
|
—
|
|
|
562
|
|
|
17,023
|
|
|
17,585
|
|
|
(1,341
|
)
|
|
10/30/2013
|
|
2012
|
|||||||||
|
7
|
11020 Sun Center Drive
|
|
Rancho Cordova, CA
|
|
—
|
|
|
1,465
|
|
|
8,537
|
|
|
—
|
|
|
—
|
|
|
1,465
|
|
|
8,537
|
|
|
10,002
|
|
|
—
|
|
|
12/20/2016
|
|
1983
|
|||||||||
|
8
|
801 K Street
|
|
Sacramento, CA
|
|
—
|
|
|
4,688
|
|
|
61,722
|
|
|
3,368
|
|
|
—
|
|
|
4,688
|
|
|
65,090
|
|
|
69,778
|
|
|
(1,425
|
)
|
|
1/29/2016
|
|
1989
|
|||||||||
|
9
|
9800 Goethe Road
|
|
Sacramento, CA
|
|
—
|
|
|
1,550
|
|
|
12,263
|
|
|
1,520
|
|
|
—
|
|
|
1,550
|
|
|
13,783
|
|
|
15,333
|
|
|
(2,773
|
)
|
|
12/23/2009
|
|
1993
|
|||||||||
|
10
|
9815 Goethe Road
|
|
Sacramento, CA
|
|
—
|
|
|
1,450
|
|
|
9,465
|
|
|
1,523
|
|
|
—
|
|
|
1,450
|
|
|
10,988
|
|
|
12,438
|
|
|
(1,444
|
)
|
|
9/14/2011
|
|
1992
|
|||||||||
|
11
|
Capitol Place
|
|
Sacramento, CA
|
|
—
|
|
|
2,290
|
|
|
35,891
|
|
|
5,695
|
|
|
—
|
|
|
2,290
|
|
|
41,586
|
|
|
43,876
|
|
|
(6,858
|
)
|
|
12/17/2009
|
|
1988
|
|||||||||
|
12
|
4181 Ruffin Road
|
|
San Diego, CA
|
|
—
|
|
|
5,250
|
|
|
10,549
|
|
|
3,737
|
|
|
—
|
|
|
5,250
|
|
|
14,286
|
|
|
19,536
|
|
|
(2,738
|
)
|
|
7/16/2010
|
|
1981
|
|||||||||
|
13
|
4560 Viewridge Road
|
|
San Diego, CA
|
|
—
|
|
|
4,269
|
|
|
18,316
|
|
|
2,795
|
|
|
—
|
|
|
4,347
|
|
|
21,033
|
|
|
25,380
|
|
|
(9,234
|
)
|
|
3/31/1997
|
|
1996
|
|||||||||
|
14
|
Sky Park Centre
|
|
San Diego, CA
|
|
—
|
|
|
685
|
|
|
5,530
|
|
|
1,689
|
|
|
—
|
|
|
685
|
|
|
7,219
|
|
|
7,904
|
|
|
(2,205
|
)
|
|
6/24/2002
|
|
1986
|
|||||||||
|
15
|
Turning Basin Business Park
|
|
Stockton, CA
|
|
—
|
|
|
563
|
|
|
5,469
|
|
|
—
|
|
|
—
|
|
|
563
|
|
|
5,469
|
|
|
6,032
|
|
|
(604
|
)
|
|
7/20/2012
|
|
2012
|
|||||||||
|
16
|
16194 West 45th Street
|
|
Golden, CO
|
|
—
|
|
|
495
|
|
|
152
|
|
|
6,457
|
|
|
—
|
|
|
495
|
|
|
6,608
|
|
|
7,103
|
|
|
(3,121
|
)
|
|
3/31/1997
|
|
1997
|
|||||||||
|
17
|
12795 West Alameda Parkway
|
|
Lakewood, CO
|
|
5,218
|
|
|
2,640
|
|
|
23,777
|
|
|
1,045
|
|
|
—
|
|
|
2,640
|
|
|
24,822
|
|
|
27,462
|
|
|
(4,303
|
)
|
|
1/15/2010
|
|
1988
|
|||||||||
|
18
|
Corporate Center
|
|
Lakewood, CO
|
|
—
|
|
|
2,887
|
|
|
27,538
|
|
|
3,850
|
|
|
—
|
|
|
2,887
|
|
|
31,386
|
|
|
34,273
|
|
|
(10,667
|
)
|
|
10/11/2002
|
|
1980
|
|||||||||
|
19
|
20 Massachusetts Avenue
|
|
Washington, DC
|
|
—
|
|
|
12,005
|
|
|
51,528
|
|
|
20,952
|
|
|
—
|
|
|
12,228
|
|
|
72,261
|
|
|
84,489
|
|
|
(31,369
|
)
|
|
3/31/1997
|
|
1996
|
|||||||||
|
20
|
625 Indiana Avenue
|
|
Washington, DC
|
|
—
|
|
|
26,000
|
|
|
25,955
|
|
|
5,799
|
|
|
—
|
|
|
26,000
|
|
|
31,754
|
|
|
57,754
|
|
|
(5,233
|
)
|
|
8/17/2010
|
|
1989
|
|||||||||
|
21
|
7850 Southwest 6th Court
|
|
Plantation, FL
|
|
—
|
|
|
4,800
|
|
|
30,592
|
|
|
383
|
|
|
—
|
|
|
4,800
|
|
|
30,975
|
|
|
35,775
|
|
|
(4,421
|
)
|
|
5/12/2011
|
|
1999
|
|||||||||
|
22
|
8900 Grand Oak Circle
|
|
Tampa, FL
|
|
8,778
|
|
|
1,100
|
|
|
11,773
|
|
|
169
|
|
|
—
|
|
|
1,100
|
|
|
11,942
|
|
|
13,042
|
|
|
(1,866
|
)
|
|
10/15/2010
|
|
1994
|
|||||||||
|
23
|
181 Spring Street NW
|
|
Atlanta, GA
|
|
—
|
|
|
5,718
|
|
|
20,017
|
|
|
131
|
|
|
—
|
|
|
5,718
|
|
|
20,147
|
|
|
25,865
|
|
|
(2,210
|
)
|
|
7/25/2012
|
|
2007
|
|||||||||
|
24
|
Corporate Square
|
|
Atlanta, GA
|
|
—
|
|
|
3,996
|
|
|
29,762
|
|
|
9,952
|
|
|
—
|
|
|
3,996
|
|
|
39,714
|
|
|
43,710
|
|
|
(10,410
|
)
|
|
7/16/2004
|
|
1967
|
|||||||||
|
25
|
Executive Park
|
|
Atlanta, GA
|
|
—
|
|
|
1,521
|
|
|
11,826
|
|
|
3,869
|
|
|
—
|
|
|
1,521
|
|
|
15,695
|
|
|
17,216
|
|
|
(4,478
|
)
|
|
7/16/2004
|
|
1972
|
|||||||||
|
26
|
One Georgia Center
|
|
Atlanta, GA
|
|
—
|
|
|
10,250
|
|
|
27,933
|
|
|
882
|
|
|
—
|
|
|
10,250
|
|
|
28,815
|
|
|
39,065
|
|
|
(3,759
|
)
|
|
9/30/2011
|
|
1968
|
|||||||||
|
27
|
4712 Southpark Boulevard
|
|
Ellenwood, GA
|
|
—
|
|
|
1,390
|
|
|
19,635
|
|
|
35
|
|
|
—
|
|
|
1,390
|
|
|
19,670
|
|
|
21,060
|
|
|
(2,168
|
)
|
|
7/25/2012
|
|
2005
|
|||||||||
|
28
|
South Vinnell Way
|
|
Boise, ID
|
|
—
|
|
|
3,390
|
|
|
29,026
|
|
|
793
|
|
|
—
|
|
|
3,390
|
|
|
29,819
|
|
|
33,209
|
|
|
(3,252
|
)
|
|
9/11/2012
|
|
1996; 1997; 2002
|
|||||||||
|
|
|
|
|
|
|
|
Initial Cost to Company
|
|
Costs Capitalized Subsequent to Acquisition
|
|
|
|
Cost amount carried at Close of Period
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
Property
|
|
Location
|
|
Encumbrances
|
|
Land
|
|
Buildings
and Equipment |
|
|
Impairments/
Writedowns |
|
Land
|
|
Buildings
and Equipment |
|
Total
(1)(2)
|
|
Accumulated
Depreciation (3) |
|
Date(s)
Acquired |
|
Original
Construction Date(s) |
|||||||||||||||||||
|
29
|
2020 S. Arlington Heights
|
|
Arlington Heights, IL
|
|
—
|
|
|
1,450
|
|
|
13,160
|
|
|
926
|
|
|
—
|
|
|
1,450
|
|
|
14,086
|
|
|
15,536
|
|
|
(2,591
|
)
|
|
12/29/2009
|
|
1988
|
|||||||||
|
30
|
Intech Park
|
|
Indianapolis, IN
|
|
—
|
|
|
4,170
|
|
|
68,888
|
|
|
2,886
|
|
|
—
|
|
|
4,170
|
|
|
71,774
|
|
|
75,944
|
|
|
(9,620
|
)
|
|
10/14/2011
|
|
2000; 2001; 2008
|
|||||||||
|
31
|
400 State Street
|
|
Kansas City, KS
|
|
—
|
|
|
640
|
|
|
9,932
|
|
|
3,108
|
|
|
—
|
|
|
640
|
|
|
13,040
|
|
|
13,680
|
|
|
(1,992
|
)
|
|
6/16/2010
|
|
1971
|
|||||||||
|
32
|
7125 Industrial Road
|
|
Florence, KY
|
|
—
|
|
|
1,698
|
|
|
11,722
|
|
|
17
|
|
|
—
|
|
|
1,698
|
|
|
11,739
|
|
|
13,437
|
|
|
(1,174
|
)
|
|
12/31/2012
|
|
1980
|
|||||||||
|
33
|
251 Causeway Street
|
|
Boston, MA
|
|
—
|
|
|
5,100
|
|
|
17,293
|
|
|
1,336
|
|
|
—
|
|
|
5,100
|
|
|
18,629
|
|
|
23,729
|
|
|
(2,858
|
)
|
|
8/17/2010
|
|
1987
|
|||||||||
|
34
|
75 Pleasant Street
|
|
Malden, MA
|
|
—
|
|
|
1,050
|
|
|
31,086
|
|
|
132
|
|
|
—
|
|
|
1,050
|
|
|
31,218
|
|
|
32,268
|
|
|
(5,168
|
)
|
|
5/24/2010
|
|
2008
|
|||||||||
|
35
|
25 Newport Avenue
|
|
Quincy, MA
|
|
—
|
|
|
2,700
|
|
|
9,199
|
|
|
809
|
|
|
—
|
|
|
2,700
|
|
|
10,008
|
|
|
12,708
|
|
|
(1,391
|
)
|
|
2/16/2011
|
|
1985
|
|||||||||
|
36
|
One Montvale Avenue
|
|
Stoneham, MA
|
|
—
|
|
|
1,670
|
|
|
11,035
|
|
|
1,599
|
|
|
—
|
|
|
1,670
|
|
|
12,634
|
|
|
14,304
|
|
|
(1,941
|
)
|
|
6/16/2010
|
|
1945
|
|||||||||
|
37
|
4201 Patterson Avenue
|
|
Baltimore, MD
|
|
—
|
|
|
901
|
|
|
8,097
|
|
|
3,472
|
|
|
—
|
|
|
901
|
|
|
11,568
|
|
|
12,469
|
|
|
(4,103
|
)
|
|
10/15/1998
|
|
1989
|
|||||||||
|
38
|
20400 Century Boulevard
|
|
Germantown, MD
|
|
—
|
|
|
2,306
|
|
|
9,890
|
|
|
538
|
|
|
—
|
|
|
2,347
|
|
|
10,386
|
|
|
12,733
|
|
|
(5,023
|
)
|
|
3/31/1997
|
|
1995
|
|||||||||
|
39
|
3300 75th Avenue
|
|
Landover, MD
|
|
—
|
|
|
4,110
|
|
|
36,371
|
|
|
607
|
|
|
—
|
|
|
4,110
|
|
|
36,978
|
|
|
41,088
|
|
|
(6,311
|
)
|
|
2/26/2010
|
|
1985
|
|||||||||
|
40
|
1401 Rockville Pike
|
|
Rockville, MD
|
|
—
|
|
|
3,248
|
|
|
29,258
|
|
|
15,797
|
|
|
—
|
|
|
3,248
|
|
|
45,058
|
|
|
48,306
|
|
|
(15,204
|
)
|
|
2/2/1998
|
|
1986
|
|||||||||
|
41
|
2115 East Jefferson Street
|
|
Rockville, MD
|
|
—
|
|
|
3,349
|
|
|
11,152
|
|
|
271
|
|
|
—
|
|
|
3,349
|
|
|
11,423
|
|
|
14,772
|
|
|
(939
|
)
|
|
8/27/2013
|
|
1981
|
|||||||||
|
42
|
Rutherford Business Park
|
|
Windsor Mill, MD
|
|
—
|
|
|
1,598
|
|
|
10,219
|
|
|
—
|
|
|
—
|
|
|
1,598
|
|
|
10,219
|
|
|
11,817
|
|
|
(1,043
|
)
|
|
11/16/2012
|
|
1972
|
|||||||||
|
43
|
Meadows Business Park
|
|
Woodlawn, MD
|
|
—
|
|
|
3,735
|
|
|
21,509
|
|
|
902
|
|
|
—
|
|
|
3,735
|
|
|
22,411
|
|
|
26,146
|
|
|
(3,232
|
)
|
|
2/15/2011
|
|
1973
|
|||||||||
|
44
|
11411 E. Jefferson Avenue
|
|
Detroit, MI
|
|
—
|
|
|
630
|
|
|
18,002
|
|
|
23
|
|
|
—
|
|
|
630
|
|
|
18,025
|
|
|
18,655
|
|
|
(3,001
|
)
|
|
4/23/2010
|
|
2009
|
|||||||||
|
45
|
330 South Second Avenue
|
|
Minneapolis, MN
|
|
—
|
|
|
3,991
|
|
|
18,186
|
|
|
9,534
|
|
|
—
|
|
|
3,991
|
|
|
27,719
|
|
|
31,710
|
|
|
(4,474
|
)
|
|
7/16/2010
|
|
1980
|
|||||||||
|
46
|
Rosedale Corporate Plaza
|
|
Roseville, MN
|
|
—
|
|
|
672
|
|
|
6,045
|
|
|
1,465
|
|
|
—
|
|
|
672
|
|
|
7,510
|
|
|
8,182
|
|
|
(2,915
|
)
|
|
12/1/1999
|
|
1987
|
|||||||||
|
47
|
1300 Summit Street
|
|
Kansas City, MO
|
|
—
|
|
|
2,776
|
|
|
12,070
|
|
|
227
|
|
|
—
|
|
|
2,776
|
|
|
12,297
|
|
|
15,073
|
|
|
(1,303
|
)
|
|
9/27/2012
|
|
1998
|
|||||||||
|
48
|
4241-4300 NE 34th Street
|
|
Kansas City, MO
|
|
—
|
|
|
1,443
|
|
|
6,193
|
|
|
2,930
|
|
|
—
|
|
|
1,780
|
|
|
8,786
|
|
|
10,566
|
|
|
(3,654
|
)
|
|
3/31/1997
|
|
1995
|
|||||||||
|
49
|
1220 Echelon Parkway
|
|
Jackson, MS
|
|
—
|
|
|
440
|
|
|
25,458
|
|
|
48
|
|
|
—
|
|
|
440
|
|
|
25,506
|
|
|
25,946
|
|
|
(2,820
|
)
|
|
7/25/2012
|
|
2009
|
|||||||||
|
50
|
10-12 Celina Avenue
|
|
Nashua, NH
|
|
—
|
|
|
3,000
|
|
|
14,052
|
|
|
439
|
|
|
—
|
|
|
3,000
|
|
|
14,491
|
|
|
17,491
|
|
|
(2,642
|
)
|
|
8/31/2009
|
|
1979
|
|||||||||
|
51
|
50 West State Street
|
|
Trenton, NJ
|
|
—
|
|
|
5,000
|
|
|
38,203
|
|
|
1,864
|
|
|
—
|
|
|
5,000
|
|
|
40,067
|
|
|
45,067
|
|
|
(5,918
|
)
|
|
12/30/2010
|
|
1989
|
|||||||||
|
52
|
435 Montano Boulevard
|
|
Albuquerque, NM
|
|
—
|
|
|
710
|
|
|
1,651
|
|
|
57
|
|
|
—
|
|
|
710
|
|
|
1,708
|
|
|
2,418
|
|
|
(271
|
)
|
|
7/16/2010
|
|
1986
|
|||||||||
|
53
|
138 Delaware Avenue
|
|
Buffalo, NY
|
|
—
|
|
|
4,405
|
|
|
18,899
|
|
|
5,010
|
|
|
—
|
|
|
4,485
|
|
|
23,829
|
|
|
28,314
|
|
|
(10,308
|
)
|
|
3/31/1997
|
|
1994
|
|||||||||
|
54
|
Airline Corporate Center
|
|
Colonie, NY
|
|
—
|
|
|
790
|
|
|
6,400
|
|
|
13
|
|
|
—
|
|
|
790
|
|
|
6,413
|
|
|
7,203
|
|
|
(720
|
)
|
|
6/22/2012
|
|
2004
|
|||||||||
|
55
|
5000 Corporate Court
|
|
Holtsville, NY
|
|
—
|
|
|
6,530
|
|
|
17,711
|
|
|
2,179
|
|
|
—
|
|
|
6,530
|
|
|
19,890
|
|
|
26,420
|
|
|
(2,585
|
)
|
|
8/31/2011
|
|
2000
|
|||||||||
|
56
|
305 East 46th Street
|
|
New York, NY
|
|
—
|
|
|
36,800
|
|
|
66,661
|
|
|
3,596
|
|
|
—
|
|
|
36,800
|
|
|
70,257
|
|
|
107,057
|
|
|
(9,436
|
)
|
|
5/27/2011
|
|
1928
|
|||||||||
|
|
|
|
|
|
|
|
Initial Cost to Company
|
|
Costs Capitalized Subsequent to Acquisition
|
|
|
|
Cost amount carried at Close of Period
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
Property
|
|
Location
|
|
Encumbrances
|
|
Land
|
|
Buildings
and Equipment |
|
|
Impairments/
Writedowns |
|
Land
|
|
Buildings
and Equipment |
|
Total
(1)(2)
|
|
Accumulated
Depreciation (3) |
|
Date(s)
Acquired |
|
Original
Construction Date(s) |
|||||||||||||||||||
|
57
|
4600 25th Avenue
|
|
Salem, OR
|
|
—
|
|
|
6,510
|
|
|
17,973
|
|
|
4,187
|
|
|
—
|
|
|
6,510
|
|
|
22,160
|
|
|
28,670
|
|
|
(3,264
|
)
|
|
12/20/2011
|
|
1957
|
|||||||||
|
58
|
Synergy Business Park
|
|
Columbia, SC
|
|
—
|
|
|
1,439
|
|
|
11,143
|
|
|
4,751
|
|
|
—
|
|
|
1,439
|
|
|
15,894
|
|
|
17,333
|
|
|
(3,108
|
)
|
|
5/10/2006; 9/17/2010
|
|
1982; 1985
|
|||||||||
|
59
|
One Memphis Place
|
|
Memphis, TN
|
|
—
|
|
|
1,630
|
|
|
5,645
|
|
|
2,421
|
|
|
—
|
|
|
1,630
|
|
|
8,066
|
|
|
9,696
|
|
|
(1,168
|
)
|
|
9/17/2010
|
|
1985
|
|||||||||
|
60
|
701 Clay Road
|
|
Waco, TX
|
|
—
|
|
|
2,030
|
|
|
8,708
|
|
|
2,779
|
|
|
—
|
|
|
2,060
|
|
|
11,457
|
|
|
13,517
|
|
|
(4,675
|
)
|
|
12/23/1997
|
|
1997
|
|||||||||
|
61
|
14660, 14672 & 14668 Lee Road
|
|
Chantilly, VA
|
|
—
|
|
|
6,974
|
|
|
74,116
|
|
|
—
|
|
|
—
|
|
|
6,974
|
|
|
74,116
|
|
|
81,090
|
|
|
—
|
|
|
12/22/2016
|
|
1998; 2002; 2006
|
|||||||||
|
62
|
Enterchange at Meadowville
|
|
Chester, VA
|
|
—
|
|
|
1,478
|
|
|
9,594
|
|
|
256
|
|
|
—
|
|
|
1,478
|
|
|
9,850
|
|
|
11,328
|
|
|
(813
|
)
|
|
8/28/2013
|
|
1999
|
|||||||||
|
63
|
3920 Pender Drive
|
|
Fairfax, VA
|
|
—
|
|
|
2,963
|
|
|
12,840
|
|
|
11
|
|
|
—
|
|
|
2,963
|
|
|
12,852
|
|
|
15,815
|
|
|
(883
|
)
|
|
3/21/2014
|
|
1981
|
|||||||||
|
64
|
Pender Business Park
|
|
Fairfax, VA
|
|
13,841
|
|
|
2,529
|
|
|
21,386
|
|
|
189
|
|
|
—
|
|
|
2,529
|
|
|
21,575
|
|
|
24,104
|
|
|
(1,773
|
)
|
|
11/4/2013
|
|
2000
|
|||||||||
|
65
|
1759 & 1760 Business Center Drive
|
|
Reston, VA
|
|
—
|
|
|
9,066
|
|
|
78,658
|
|
|
1,906
|
|
|
—
|
|
|
9,066
|
|
|
80,564
|
|
|
89,630
|
|
|
(5,137
|
)
|
|
5/28/2014
|
|
1987
|
|||||||||
|
66
|
9960 Mayland Drive
|
|
Richmond, VA
|
|
—
|
|
|
2,614
|
|
|
15,930
|
|
|
1,244
|
|
|
—
|
|
|
2,614
|
|
|
17,174
|
|
|
19,788
|
|
|
(1,066
|
)
|
|
5/20/2014
|
|
1994
|
|||||||||
|
67
|
Aquia Commerce Center
|
|
Stafford, VA
|
|
—
|
|
|
2,090
|
|
|
7,465
|
|
|
730
|
|
|
—
|
|
|
2,090
|
|
|
8,195
|
|
|
10,285
|
|
|
(1,070
|
)
|
|
6/22/2011
|
|
1988; 1999
|
|||||||||
|
68
|
65 Bowdoin Street
|
|
S. Burlington, VT
|
|
—
|
|
|
700
|
|
|
8,416
|
|
|
120
|
|
|
—
|
|
|
700
|
|
|
8,536
|
|
|
9,236
|
|
|
(1,439
|
)
|
|
4/9/2010
|
|
2009
|
|||||||||
|
69
|
840 North Broadway
|
|
Everett, WA
|
|
—
|
|
|
3,360
|
|
|
15,376
|
|
|
1,346
|
|
|
—
|
|
|
3,360
|
|
|
16,722
|
|
|
20,082
|
|
|
(1,933
|
)
|
|
6/28/2012
|
|
1985
|
|||||||||
|
70
|
Stevens Center
|
|
Richland, WA
|
|
—
|
|
|
3,970
|
|
|
17,035
|
|
|
1,606
|
|
|
—
|
|
|
4,042
|
|
|
18,569
|
|
|
22,611
|
|
|
(8,640
|
)
|
|
3/31/1997
|
|
1995
|
|||||||||
|
71
|
11050 West Liberty Drive
|
|
Milwaukee, WI
|
|
—
|
|
|
945
|
|
|
4,539
|
|
|
103
|
|
|
—
|
|
|
945
|
|
|
4,642
|
|
|
5,587
|
|
|
(645
|
)
|
|
6/9/2011
|
|
2006
|
|||||||||
|
72
|
2029 Stonewall Jackson Drive
|
|
Falling Waters, WV
|
|
—
|
|
|
906
|
|
|
3,886
|
|
|
270
|
|
|
—
|
|
|
922
|
|
|
4,140
|
|
|
5,062
|
|
|
(2,005
|
)
|
|
3/31/1997
|
|
1993
|
|||||||||
|
73
|
5353 Yellowstone Road
|
|
Cheyenne, WY
|
|
—
|
|
|
1,915
|
|
|
8,217
|
|
|
531
|
|
|
—
|
|
|
1,950
|
|
|
8,713
|
|
|
10,663
|
|
|
(4,218
|
)
|
|
3/31/1997
|
|
1995
|
|||||||||
|
|
|
|
|
|
$
|
27,837
|
|
|
$
|
266,943
|
|
|
$
|
1,464,432
|
|
|
$
|
157,385
|
|
|
$
|
—
|
|
|
$
|
267,855
|
|
|
$
|
1,620,905
|
|
|
$
|
1,888,760
|
|
|
$
|
(296,804
|
)
|
|
|
|
|
|
Assets Discontinued Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
74
|
5600 Columbia Pike
|
|
Falls Church, VA
|
|
—
|
|
|
3,519
|
|
|
15,098
|
|
|
4,065
|
|
|
(10,423
|
)
|
|
3,044
|
|
|
9,216
|
|
|
12,260
|
|
|
—
|
|
|
3/31/1997
|
|
1993
|
|||||||||
|
|
|
|
|
|
$
|
27,837
|
|
|
$
|
270,462
|
|
|
$
|
1,479,530
|
|
|
$
|
161,450
|
|
|
$
|
(10,423
|
)
|
|
$
|
270,899
|
|
|
$
|
1,630,121
|
|
|
$
|
1,901,020
|
|
|
$
|
(296,804
|
)
|
|
|
|
|
|
|
Real Estate Properties
|
|
Accumulated Depreciation
|
||||
|
Balance at December 31, 2013
|
$
|
1,568,562
|
|
|
$
|
187,635
|
|
|
Additions
|
151,316
|
|
|
37,671
|
|
||
|
Loss on asset impairment
|
(7,058
|
)
|
|
(5,071
|
)
|
||
|
Disposals
|
(444
|
)
|
|
(444
|
)
|
||
|
Reclassification of assets held for sale
|
(29,896
|
)
|
|
—
|
|
||
|
Balance at December 31, 2014
|
1,682,480
|
|
|
219,791
|
|
||
|
Additions
|
19,622
|
|
|
38,987
|
|
||
|
Disposals
|
(2,624
|
)
|
|
(2,624
|
)
|
||
|
Reclassification of assets held for sale
|
(3,346
|
)
|
|
(275
|
)
|
||
|
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
|
|
|
|
GOVERNMENT PROPERTIES INCOME TRUST
|
|
|
|
|
By:
|
/s/ David M. Blackman
|
|
|
|
|
David M. Blackman
President and Chief Operating Officer
|
|
|
|
|
|
|
|
|
Dated: February 22, 2017
|
|
|
|
|
|
|
|
Signature
|
Title
|
Date
|
|
/s/ David M. Blackman
|
President and Chief Operating Officer
|
February 22, 2017
|
|
David M. Blackman
|
||
|
|
|
|
|
/s/ Mark L. Kleifges
|
Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer)
|
February 22, 2017
|
|
Mark L. Kleifges
|
||
|
|
|
|
|
/s/ Adam D. Portnoy
|
Managing Trustee
|
February 22, 2017
|
|
Adam D. Portnoy
|
||
|
|
|
|
|
/s/ Barry M. Portnoy
|
Managing Trustee
|
February 22, 2017
|
|
Barry M. Portnoy
|
||
|
|
|
|
|
/s/ John L. Harrington
|
Independent Trustee
|
February 22, 2017
|
|
John L. Harrington
|
||
|
|
|
|
|
/s/ Barbara D. Gilmore
|
Independent Trustee
|
February 22, 2017
|
|
Barbara D. Gilmore
|
||
|
|
|
|
|
/s/ Jeffrey P. Somers
|
Independent Trustee
|
February 22, 2017
|
|
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 |
|---|