Washington Real Estate Investment Trust Announces 9% FFO Per Share Growth for the Year 2007

ROCKVILLE, Md.--(BUSINESS WIRE)--

Washington Real Estate Investment Trust (WRIT) (NYSE:WRE) reported financial and operating results today for the year and quarter ending December 31, 2007:

    --  Net income for the year ending December 31, 2007 was $1.34 per
        diluted share, compared to $0.88 per diluted share in 2006.
        Net income for the quarter ending December 31, 2007 was $0.18
        per diluted share, compared to $0.22 per diluted share in the
        same period one year ago.

    --  Funds from Operations (FFO)(1) for the year ending December
        31, 2007 increased 9% to $2.31 per diluted share compared to
        $2.12 per diluted share the prior year. FFO for the quarter
        ending December 31, 2007 of $0.59 per diluted share increased
        5% over the same period in the prior year compared to $0.56
        per diluted share.

    Operating Results

Core Net Operating Income (NOI)(2) for the year 2007 increased 4.2% compared to last year and rental rate growth was 3.4%.

Core NOI for the fourth quarter increased by 6.8%, or $2.7 million, compared to the same period one year ago. The increase in core NOI is due to rental rate growth of 3.2% and an economic occupancy increase of 110 basis points. Rental rate growth was achieved in all sectors; the increase in economic occupancy was primarily achieved in the office sector.

    --  Office properties' core NOI for the fourth quarter increased
        6.2% compared to the same period one year ago. Economic
        occupancy increased 310 bps to 95.3%, mainly due to leasing at
        7900 Westpark, 1600 Wilson Boulevard, and Lexington office
        buildings. Rental rate growth for the office sector was 2.7%.

    --  Retail properties' core NOI for the fourth quarter increased
        13.7% compared to the same period one year ago. Rental rate
        growth was 4.1%, primarily due to rate increases at the newly
        redeveloped Shoppes at Foxchase, Frederick County Square and
        Bradlee Shopping Center. Economic occupancy increased 130 bps
        to 96.1% due to occupancy gains at Montrose Shopping Center.

    --  Industrial properties' core NOI for the fourth quarter
        increased 2.7% compared to the same period one year ago due to
        rental rate growth of 2.9%. Economic occupancy increased 140
        bps to 96.0% from the same quarter one year ago.

    --  Medical office properties' core NOI for the fourth quarter
        increased 8.2% compared to the same period one year ago.
        Rental rate growth was 2.1% and economic occupancy remains
        high for the medical office sector at 97.9%.

    --  Multifamily properties' core NOI for the fourth quarter
        increased 2.8% compared to the same period one year ago.
        Rental rate growth was 4.9% while economic occupancy declined
        350 bps quarter-over-quarter to 90.5%. Rental rate growth was
        driven by new leases at 3801 Connecticut Avenue, Bethesda Hill
        Apartments and Avondale Apartments.

Core occupancy was 95.1% during the fourth quarter of 2007, an increase of 110 bps from the same period in the prior year.

Leasing Activity

During the fourth quarter, WRIT signed commercial leases for 542,000 square feet, with an average rental rate increase of 16.9% and tenant improvement costs of $6.31 per square foot. Residential rental rates increased 4.9% in the fourth quarter.

    --  Rental rates for new and renewed retail leases increased
        37.3%, with $3.29 per square foot in tenant improvement costs.

    --  Rental rates for new and renewed office leases increased
        11.6%, with $12.32 per square foot in tenant improvement
        costs.

    --  Rental rates for new and renewed medical office leases
        increased 25.5%, with $20.42 per square foot in tenant
        improvement costs.

    --  Rental rates for new and renewed industrial/flex leases
        increased 15.7%, with $2.13 per square foot in tenant
        improvement costs.

For the full year, WRIT signed commercial leases for 1,765,000 square feet, with an average rental rate increase of 17.3% and tenant improvement costs of $6.62 per square foot.

Acquisition Activity

On December 4, 2007, WRIT acquired the leasehold interest for 2000 M Street, NW, an eight-story, 227,000 square foot Class A office building with a three-level parking garage in Washington, D.C. for $73.5 million. Upon acquisition, the property was 100% leased to 21 tenants. WRIT expects to achieve a first-year, unleveraged yield of 6.2% on a cash basis and 6.7% on a GAAP basis. The acquisition was financed with proceeds from a 1031 exchange and borrowings on our line of credit.

    Development Activity

    --  In July, WRIT completed base construction on Dulles Station, a
        180,000 square foot development project of Class A office and
        retail space located in Herndon, VA. The building, prominently
        visible from the Dulles Toll Road, is part of a mixed-use
        development which will include 1,095 multifamily units and
        56,000 square feet of retail and restaurant space.

    --  This quarter WRIT delivered the majority of units at Bennett
        Park. Bennett Park is a ground-up development project in
        Arlington, VA consisting of high-rise and mid-rise Class A
        apartment buildings with a total of 224 units and 5,900 square
        feet of retail space. The property was 24% leased at year-end.

    --  Subsequent to year-end, WRIT began delivering units at The
        Clayborne Apartments. The Clayborne is a ground-up development
        project in Alexandria, VA, adjacent to our 800 South
        Washington retail property. The project consists of a 74-unit
        Class A apartment building that will include 2,600 square feet
        of additional retail space.

    Capital Structure

Subsequent to year-end, WRIT exercised a portion of the accordion feature on one of its unsecured revolving credit facilities. WRIT's total borrowing capacity was increased to $337 million at a rate of LIBOR plus 0.425%.

On December 31, 2007, WRIT paid a quarterly dividend of $0.4225 per share for its 184th consecutive quarterly dividend at equal or increasing rates.

As of December 31, 2007 WRIT had a total capitalization of $2.8 billion.

Earnings Guidance

2008 earnings guidance assumes occupancy for the core portfolio will be maintained at 95% for the full year. Therefore, growth will be driven primarily by the full-year effect of 2007 acquisitions, leasing at completed development projects and rental rate increases/decreases on expiring leases.


    --  Net Operating Income for the overall portfolio is expected to
        increase 7-9% over 2007. Core Portfolio NOI is expected to
        increase 1.5-2.5%.

    --  The Bennett Park and Clayborne apartment developments are
        projected to be ratably leased throughout 2008 and to be 95%
        leased by year-end. Due to weakness in the Northern Virginia
        market, guidance assumes no rental income at Dulles Station
        until 2009.

    --  Guidance assumes $100-120 million of real estate acquisitions.
        The acquisitions will be funded with borrowings on WRIT's line
        of credit, unsecured and secured term debt and reinvested net
        disposition proceeds for properties expected to be sold in the
        second and third quarters.

    --  Projected interest expense will increase 13-16% over the prior
        year. The increase is primarily due to interest recognition on
        the completion of three development projects, which had
        previously been capitalized.

    --  General & administrative expense is projected to decrease by
        9-11%, primarily due to one time expenses in 2007, including
        compensation for a retiring executive and bond consent
        solicitation fees.

    --  In the first quarter, WRIT will complete an extinguishment of
        debt on $60 million of 10-year Mandatory Par Put Remarketed
        Securities ("MOPPRS") that are due for remarketing on February
        25, 2008, resulting in an $8.4 million non-recurring charge
        related to the current benchmark treasury rate. WRIT will
        refinance the 6.74% debt, plus refinance a portion of line
        outstandings, by issuing a $100 million 2-year term loan,
        which will be swapped for a fixed rate of 4.5%. By
        extinguishing the debt, WRIT estimates it will save
        approximately $5.6 million of interest expense in the first
        two years alone.

2008 Earnings Guidance                                    Low - High
----------------------------------------------------------------------
Projected FFO per share (diluted), excl. non-recurring
 items                                                   $2.29 - $2.39
----------------------------------------------------------------------
Less:
Projected Tenant Improvements, Recurring Capital
 Improvements, Capitalized Leasing Commissions, and
 Straight-Line Rent                                      $0.74 - $0.78
----------------------------------------------------------------------
Add:
Non-Real Estate Depreciation & Amortization,
 Amortization of Lease Intangibles, Amortization of
 Restricted Shares, and Other                            $0.10 - $0.14
----------------------------------------------------------------------
Projected FAD per share (diluted), excl. non-recurring
 items                                                   $1.65 - $1.75
----------------------------------------------------------------------

----------------------------------------------------------------------
-----
----------------------------------------------------------------------
Non-recurring Item: Loss on Extinguishment of Debt           $0.18
----------------------------------------------------------------------

----------------------------------------------------------------------
Projected FFO per share (diluted)                        $2.11 - $2.21
----------------------------------------------------------------------
Projected FAD per share (diluted)                        $1.47 - $1.58
----------------------------------------------------------------------

Conference Call Information

The Conference Call for 4th Quarter Earnings is scheduled for Friday, February 22, 2008 at 11:00 A.M. Eastern Standard Time. Conference Call access information is as follows:

USA Toll Free Number:                1-877-407-9205
International Toll Number:           1-201-689-8054
Leader:                              Sara Grootwassink

The instant replay of the Conference Call will be available until March 7, 2008 at 11:59 P.M. Eastern Standard Time. Instant Replay access information is as follows:

USA Toll Free Number:               1-877-660-6853
International Toll Number:          1-201-612-7415
Account:                            286
Conference ID:                      268366

The live on-demand webcast of the Conference Call will also be available on WRIT's website at www.writ.com. On-line playback of the webcast will be available at http://www.writ.com for two weeks following the Conference Call.

About WRIT

WRIT is a self-administered, self-managed, equity real estate investment trust investing in income-producing properties in the greater Washington metropolitan region. WRIT owns a diversified portfolio of 89 properties consisting of 14 retail centers, 25 office properties, 17 medical office properties, 23 industrial/flex properties, 10 multifamily properties and land for development. WRIT's dividends have increased every year for 37 consecutive years and FFO per share has increased every year for 35 consecutive years. WRIT shares are publicly traded on the New York Stock Exchange (symbol:WRE).

Note: WRIT's press releases and supplemental financial information are available on the company website at www.writ.com or by contacting Investor Relations at (301) 984-9400.

Certain statements in this press release and the supplemental disclosures attached hereto are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such risks, uncertainties and other factors include, but are not limited to, fluctuations in interest rates, availability of raw materials and labor costs, levels of competition, the effect of government regulation, the availability of capital, weather conditions, the timing and pricing of lease transactions and changes in general and local economic and real estate market conditions, and other risks and uncertainties detailed from time to time in our filings with the SEC, including our 2007 Form 10-K. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

(1) Funds From Operations ("FFO") - The National Association of Real Estate Investment Trusts, Inc. ("NAREIT") defines FFO (April, 2002 White Paper) as net income (computed in accordance with generally accepted accounting principles ("GAAP")) excluding gains (or losses) from sales of property plus real estate depreciation and amortization. We consider FFO to be a standard supplemental measure for equity real estate investment trusts ("REITs") because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which historically assumes that the value of real estate assets diminishes predictably over time. Since real estate values have instead historically risen or fallen with market conditions, we believe that FFO more accurately provides investors an indication of our ability to incur and service debt, make capital expenditures and fund other needs.

(2) For purposes of evaluating comparative operating performance, we categorize our properties as "core" or "non-core". Core Operating NOI is calculated as real estate rental revenue less real estate operating expenses for those properties owned for the entirety of the periods being evaluated. Core Operating NOI is a non-GAAP measure.

(3) Funds Available for Distribution ("FAD") is calculated by subtracting from FFO (1) recurring expenditures, tenant improvements and leasing costs that are capitalized and amortized and are necessary to maintain our properties and revenue stream and (2) straight line rents, then adding (3) non-real estate depreciation and amortization, (4) amortization of restricted share and unit compensation, and adding or subtracting amortization of lease intangibles, as appropriate. FAD is included herein, because we consider it to be a measure of a REIT's ability to incur and service debt and to distribute dividends to its shareholders. FAD is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.

Economic Occupancy Levels by Core Portfolio(i) and All Properties
----------------------------------------------------------------------
                                    Core Portfolio    All Properties
Sector                              4th QTR 4th QTR 4th QTR    4th QTR
                                     2007    2006    2007       2006
Residential                           90.5%   94.0%   84.9%(ii)  94.0%
Office                                95.3%   92.2%   95.6%      92.4%
Medical Office                        97.9%   98.5%   97.8%      98.5%
Retail                                96.1%   94.8%   96.1%      94.8%
Industrial                            96.0%   94.6%   95.5%      93.0%

Overall Portfolio                     95.1%   94.0%   94.3%      93.8%
(i) Core portfolio properties include all properties that were owned
 for the entirety of the current and prior year reporting periods. For
 Q4 2007 and Q4 2006, core portfolio properties exclude:
Office Acquisitions: 2000 M Street, Woodholme Center, and Monument II;
----------------------------------------------------------------------
Medical Office Acquisitions: CentreMed I & II, Ashburn Farm Park,
 Woodholme Medical Office Building, 2440 M Street;
----------------------------------------------------------------------
Retail Acquisitions: none;
----------------------------------------------------------------------
Industrial Acquisitions: 270 Technology Park
----------------------------------------------------------------------

Also excluded from Core Properties in Q4 2007 and Q4 2006 are Sold
 Properties: Maryland Trade Centers I & II; Held for Sale Properties:
 Sullyfield Center and The Earhart Building; and In Development
 Properties: Bennett Park, Clayborne Apartments, and 4661 Kenmore Ave

(ii) Residential occupancy for all properties decreased from 94.0% to
 84.9%, primarily due to the completion of Bennett Park. At 12/31/07,
 211 of 224 units were complete, and 50 units (23.6%) were occupied.
               WASHINGTON REAL ESTATE INVESTMENT TRUST
                         FINANCIAL HIGHLIGHTS
                (In thousands, except per share data)
                             (Unaudited)


                           Three Months Ended    Twelve Months Ended
                              December 31,          December 31,
OPERATING RESULTS            2007      2006       2007        2006
------------------         --------- --------- ----------- -----------
Revenue
  Real estate
   rental revenue          $ 67,528  $ 56,282  $  255,655  $  208,741

Expenses
  Real estate
   expenses                  21,271    17,259      79,914      63,225
  Depreciation and
   amortization              18,998    14,133      69,775      50,915
  General and
   administrative             3,675     2,461      15,099      12,622
                           --------- --------- ----------- -----------
                             43,944    33,853     164,788     126,762
                           --------- --------- ----------- -----------

Other (expense)
 income:
  Interest expense          (16,400)  (13,248)    (61,906)    (47,265)
  Other income                  480       269       1,875         906
  Other income
   from life
   insurance
   proceeds                       -         -       1,303           -
                           --------- --------- ----------- -----------
                            (15,920)  (12,979)    (58,728)    (46,359)
                           --------- --------- ----------- -----------


Income from
 continuing
 operations                   7,664     9,450      32,139      35,620

Discontinued
 operations:
  Income from
   operations of
   properties sold
   or held for
   sale                         778       631       4,720       3,041
  Gain on property
   disposed                       -         -      25,022           -
                           --------- --------- ----------- -----------

Net Income                 $  8,442  $ 10,081  $   61,881  $   38,661
                           ========= ========= =========== ===========

Income from
 continuing
 operations                $  7,664  $  9,450  $   32,139  $   35,620
Other income from
 life insurance
 proceeds                         -         -      (1,303)          -
Continuing
 operations real
 estate
 depreciation and
 amortization                18,998    14,133      69,775      50,915
                           --------- --------- ----------- -----------
Funds from
 continuing
 operations                $ 26,662  $ 23,583  $  100,611  $   86,535
                           --------- --------- ----------- -----------

Income from
 discontinued
 operations before
 gain on disposal               778       631       4,720       3,041
Discontinued
 operations real
 estate
 depreciation and
 amortization                    87       941       1,250       3,255
                           --------- --------- ----------- -----------
Funds from
 discontinued
 operations                     865     1,572       5,970       6,296
                           --------- --------- ----------- -----------

Funds from
 operations(1)             $ 27,527  $ 25,155  $  106,581  $   92,831
                           ========= ========= =========== ===========


Tenant
 improvements                (5,026)   (2,143)    (16,587)     (9,473)
External and
 internal leasing
 commissions
 capitalized                 (1,613)   (1,554)     (6,005)     (5,595)
Recurring capital
 improvements                (3,899)   (1,648)    (11,895)     (8,685)
Straight-line
 rents, net                    (957)     (757)     (4,204)     (3,093)
Non real estate
 depreciation &
 amortization of
 debt costs                   1,011       765       3,572       2,453
Amortization of
 lease
 intangibles, net              (191)      197      (1,381)        283
Amortization and
 expensing of
 restricted share
 and unit
 compensation                   850     1,081       4,088       3,464
Other                             -         -       1,303           -
                           -------------------------------------------
Funds Available
 for Distribution
 (3)                       $ 17,702  $ 21,096  $   75,472  $   72,185
                           ========= ========= =========== ===========


Certain prior year amounts have been reclassified to conform to the
 current presentation.

                           Three Months Ended    Twelve Months Ended
                              December 31,          December 31,
Per Share Data               2007      2006       2007        2006
------------------         --------- --------- ----------- -----------

Income from       (Basic)
 continuing
 operations                $   0.16  $   0.21  $     0.70  $     0.82
                  (Diluted)$   0.16  $   0.21  $     0.70  $     0.81
Net income        (Basic)  $   0.18  $   0.22  $     1.35  $     0.89
                  (Diluted)$   0.18  $   0.22  $     1.34  $     0.88
Funds from        (Basic)
 continuing
 operations                $   0.57  $   0.53  $     2.19  $     1.98
                  (Diluted)$   0.57  $   0.52  $     2.18  $     1.97
Funds from        (Basic)
 operations                $   0.59  $   0.56  $     2.32  $     2.13
                  (Diluted)$   0.59  $   0.56  $     2.31  $     2.12

Dividends paid             $ 0.4225  $ 0.4125  $   1.6800  $   1.6400

Weighted average
 shares
 outstanding                 46,604    44,894      45,911      43,679
Fully diluted
 weighted average
 shares
 outstanding                 46,822    45,122      46,115      43,874
               WASHINGTON REAL ESTATE INVESTMENT TRUST
                     CONSOLIDATED BALANCE SHEETS
                (In thousands, except per share data)
                             (Unaudited)


                                             December 31, December 31,
                                                 2007         2006
                                             ------------ ------------
Assets
  Land                                        $  328,951   $  285,103
  Income producing property                    1,635,169    1,238,548
                                             ------------ ------------
                                               1,964,120    1,523,651
  Accumulated depreciation and amortization     (331,991)    (271,342)
                                             ------------ ------------
    Net income producing property              1,632,129    1,252,309
  Development in progress(4)                      98,321      120,656
                                             ------------ ------------
    Total real estate held for investment,
     net                                       1,730,450    1,372,965

  Investment in real estate sold or held for
   sale                                           23,843       53,489
  Cash and cash equivalents                       21,488        8,721
  Restricted cash                                  6,030        4,151
  Rents and other receivables, net of
   allowance for doubtful accounts of $4,227
   and $3,258, respectively                       36,595       30,229
  Prepaid expenses and other assets               78,517       58,049
  Other assets related to property sold or
   held for sale                                   1,403        3,661
                                             ------------ ------------
    Total Assets                              $1,898,326   $1,531,265
                                             ============ ============

Liabilities
  Notes payable                               $  879,123   $  728,255
  Mortgage notes payable                         252,484      229,240
  Lines of credit                                192,500       61,000
  Accounts payable and other liabilities          63,543       45,009
  Advance rents                                    9,552        5,825
  Tenant security deposits                        10,487        9,128
  Other liabilities related to property sold
   or held for sale                                  317        9,138
                                             ------------ ------------
    Total Liabilities                          1,408,006    1,087,595
                                             ------------ ------------

Minority interest                                  3,776        1,739
                                             ------------ ------------

Shareholders' Equity
  Shares of beneficial interest, $0.01 par
   value; 100,000 shares authorized: 46,682
   and 45,042 shares issued and outstanding,
   respectively                                      468          451
  Additional paid-in capital                     561,492      500,727
  Distributions in excess of net income          (75,416)     (59,247)
                                             ------------ ------------
    Total Shareholders' Equity                   486,544      441,931
                                             ------------ ------------
    Total Liabilities and Shareholders'
     Equity                                   $1,898,326   $1,531,265
                                             ============ ============
Note: Certain prior year amounts have been reclassified to conform to
 the current year presentation.

(4) Includes cost of land acquired for in development properties.

Source: Washington Real Estate Investment Trust (WRIT)