Real Estate (Tables)
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12 Months Ended |
Dec. 31, 2019 |
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| Real Estate [Abstract] |
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| Schedule of Real Estate Investment Portfolio |
As of December 31, 2019 and 2018, our real estate investment portfolio classified as income producing property that is held and used, at cost, consists of properties as follows (in thousands):
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|
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December 31, |
|
2019 |
|
2018 |
Multifamily |
$ |
1,469,011 |
|
|
$ |
919,285 |
|
Office |
1,329,722 |
|
|
1,507,986 |
|
Other (1)
|
160,489 |
|
|
154,650 |
|
|
$ |
2,959,222 |
|
|
$ |
2,581,921 |
|
______________________________
(1)
Consists of the retail properties not classified as discontinued operations: Takoma Park, Westminster, Concord Centre, Chevy Chase Metro Plaza, 800 S. Washington Street, Randolph Shopping Center, Montrose Shopping Center and Spring Valley Village.
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| Schedule of Costs of Real Estate Portfolio Under Development of Held for Future Development |
The cost of our real estate portfolio under development or held for future development as of December 31, 2019 and 2018 is as follows (in thousands):
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December 31, |
|
2019 |
|
2018 |
Multifamily |
$ |
123,071 |
|
|
$ |
83,945 |
|
Office |
478 |
|
|
478 |
|
Other |
644 |
|
|
2,808 |
|
|
$ |
124,193 |
|
|
$ |
87,231 |
|
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| Schedule of Real Estate Properties Acquired |
Properties and land for development acquired during the three years ended December 31, 2019 were as follows:
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Acquisition Date |
|
Property |
|
Type |
|
# of units (unaudited) |
|
Rentable
Square Feet
(unaudited)
|
|
Contract
Purchase Price
(in thousands)
|
April 30, 2019 |
|
Assembly Portfolio - Virginia (1)
|
|
Multifamily |
|
1,685 |
|
|
N/A |
|
$ |
379,100 |
|
June 27, 2019 |
|
Assembly Portfolio - Maryland (2)
|
|
Multifamily |
|
428 |
|
|
N/A |
|
82,070 |
|
July 23, 2019 |
|
Cascade at Landmark |
|
Multifamily |
|
277 |
|
|
N/A |
|
69,750 |
|
|
|
|
|
|
|
2,390 |
|
|
|
|
$ |
530,920 |
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|
|
|
|
|
|
|
|
|
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January 18, 2018 |
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Arlington Tower |
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Office |
|
N/A |
|
391,000 |
|
$ |
250,000 |
|
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|
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|
|
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April 4, 2017 |
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Watergate 600 |
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Office |
|
N/A |
|
293,000 |
|
$ |
135,000 |
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______________________________
|
|
(1) |
Consists of Assembly Alexandria, Assembly Manassas, Assembly Dulles, Assembly Leesburg, and Assembly Herndon. |
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|
(2) |
Consists of Assembly Germantown and Assembly Watkins Mill. The Assembly Portfolio - Virginia and Assembly Portfolio - Maryland properties are collectively the “Assembly Portfolio.” |
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| Schedule of Revenue and Earnings from Acquired Operating Properties |
The revenue and earnings of our acquisitions during their year of acquisition for the three years ended December 31, 2019 are as follows (in thousands):
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Year Ended December 31, |
|
2019 |
|
2018 |
|
2017 |
Real estate rental revenue |
$ |
27,641 |
|
|
$ |
22,389 |
|
|
$ |
14,518 |
|
Net (loss) income |
(10,167 |
) |
|
3,623 |
|
|
2,226 |
|
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| Schedule of Recorded Cost of Asset Acquisitions |
We recorded the total cost of the above acquisitions as follows (in thousands):
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2019 |
|
2018 |
|
2017 |
Land |
$ |
92,391 |
|
|
$ |
63,970 |
|
|
$ |
45,981 |
|
Buildings and improvements |
423,663 |
|
|
142,900 |
|
|
66,241 |
|
Tenant origination costs |
— |
|
|
13,625 |
|
|
12,084 |
|
Leasing commissions/absorption costs |
15,474 |
|
|
27,465 |
|
|
23,161 |
|
Net lease intangible assets |
— |
|
|
3,142 |
|
|
498 |
|
Net lease intangible liabilities |
— |
|
|
(545 |
) |
|
(9,585 |
) |
Deferred tax liability |
— |
|
|
— |
|
|
(560 |
) |
Total |
$ |
531,528 |
|
|
$ |
250,557 |
|
|
$ |
137,820 |
|
|
| Schedule of Components of Fair Value of In-Place Leases |
Balances, net of accumulated depreciation or amortization, as appropriate, of the components of the fair value of in-place leases at December 31, 2019 and 2018 were as follows (in thousands):
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December 31, |
|
2019 |
|
2018 |
|
Gross Carrying Value |
|
Accumulated Amortization |
|
Net |
|
Gross Carrying Value |
|
Accumulated Amortization |
|
Net |
Tenant origination costs |
$ |
50,155 |
|
|
$ |
33,364 |
|
|
$ |
16,791 |
|
|
$ |
57,897 |
|
|
$ |
36,570 |
|
|
$ |
21,327 |
|
Leasing commissions/absorption costs |
122,348 |
|
|
92,401 |
|
|
29,947 |
|
|
114,354 |
|
|
77,194 |
|
|
37,160 |
|
Net lease intangible assets |
15,183 |
|
|
11,964 |
|
|
3,219 |
|
|
16,353 |
|
|
11,947 |
|
|
4,406 |
|
Net lease intangible liabilities |
29,836 |
|
|
20,854 |
|
|
8,982 |
|
|
31,124 |
|
|
20,016 |
|
|
11,108 |
|
Below-market ground lease intangible asset |
12,080 |
|
|
2,282 |
|
|
9,798 |
|
|
12,080 |
|
|
2,093 |
|
|
9,987 |
|
Amortization of these combined components during the three years ended December 31, 2019, 2018 and 2017 was as follows (in thousands):
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Year Ended December 31, |
|
2019 |
|
2018 |
|
2017 |
Depreciation and amortization expense |
$ |
27,123 |
|
|
$ |
22,361 |
|
|
$ |
13,996 |
|
Real estate rental revenue increase, net |
(924 |
) |
|
(1,225 |
) |
|
(776 |
) |
|
$ |
26,199 |
|
|
$ |
21,136 |
|
|
$ |
13,220 |
|
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| Schedule of Future Amortization of Components of Fair Value of In-Place Leases |
Amortization of these combined components over the next five years is projected to be as follows (in thousands):
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Depreciation and amortization expense |
|
Real estate rental revenue, net increase |
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Total |
2020 |
$ |
9,975 |
|
|
$ |
(406 |
) |
|
$ |
9,569 |
|
2021 |
8,576 |
|
|
(547 |
) |
|
8,029 |
|
2022 |
8,078 |
|
|
(736 |
) |
|
7,342 |
|
2023 |
6,032 |
|
|
(974 |
) |
|
5,058 |
|
2024 |
5,264 |
|
|
(862 |
) |
|
4,402 |
|
Thereafter |
18,611 |
|
|
(2,238 |
) |
|
16,373 |
|
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| Schedule of Properties Held-for-Sale or Sold and Discontinued Operations |
We classified as held for sale or sold our interests in the following properties during the three years ended December 31, 2019:
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Disposition Date |
|
Property |
|
Type |
|
# of units (unaudited) |
|
Rentable
Square Feet
(unaudited) |
|
Contract
Sale Price
(in thousands) |
|
(Loss) Gain on Sale
(in thousands) |
June 26, 2019 |
|
Quantico Corporate Center (1)
|
|
Office |
|
N/A |
|
|
272,000 |
|
|
$ |
33,000 |
|
|
$ |
(1,046 |
) |
July 23, 2019 |
|
Shopping Center Portfolio (2)
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Retail |
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N/A |
|
|
800,000 |
|
|
485,250 |
|
|
333,023 |
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August 21, 2019 |
|
Frederick Crossing and Frederick County Square |
|
Retail |
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N/A |
|
|
520,000 |
|
|
57,500 |
|
|
9,507 |
|
August 27, 2019 |
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Centre at Hagerstown |
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Retail |
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N/A |
|
|
330,000 |
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|
23,500 |
|
|
(3,506 |
) |
December 19, 2019 |
|
1776 G Street |
|
Office |
|
N/A |
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|
262,000 |
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|
129,500 |
|
|
61,007 |
|
N/A |
|
John Marshall II |
|
Office |
|
N/A |
|
|
223,000 |
|
|
63,350 |
|
|
N/A |
|
|
|
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Total 2019 |
|
|
|
2,407,000 |
|
|
$ |
792,100 |
|
|
$ |
398,985 |
|
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|
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|
|
|
|
|
|
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January 19, 2018 |
|
Braddock Metro Center |
|
Office |
|
N/A |
|
|
356,000 |
|
|
$ |
93,000 |
|
|
$ |
— |
|
June 28, 2018 |
|
2445 M Street |
|
Office |
|
N/A |
|
|
292,000 |
|
|
101,600 |
|
|
2,495 |
|
|
|
|
|
Total 2018 |
|
|
|
648,000 |
|
|
$ |
194,600 |
|
|
$ |
2,495 |
|
|
|
|
|
|
|
|
|
|
|
|
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October 23, 2017 |
|
Walker House Apartments |
|
Multifamily |
|
212 |
|
|
N/A |
|
|
$ |
32,200 |
|
|
$ |
23,838 |
|
|
|
|
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Total 2017 |
|
|
|
|
|
$ |
32,200 |
|
|
$ |
23,838 |
|
______________________________
|
|
(1) |
Consists of 925 and 1000 Corporate Drive. |
|
|
(2) |
Consists of five retail properties: Gateway Overlook, Wheaton Park, Olney Village Center, Bradlee Shopping Center and Shoppes of Foxchase. |
The results of the Retail Portfolio are classified as discontinued operations and are summarized as follows (amounts in thousands, except for share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
|
2017 |
Real estate rental revenue |
$ |
28,200 |
|
|
$ |
45,160 |
|
|
$ |
44,797 |
|
Real estate expenses |
(6,803 |
) |
|
(10,638 |
) |
|
(10,251 |
) |
Depreciation and amortization |
(4,926 |
) |
|
(9,402 |
) |
|
(10,626 |
) |
Interest expense |
(313 |
) |
|
(643 |
) |
|
(740 |
) |
Loss on extinguishment of debt |
(764 |
) |
|
— |
|
|
— |
|
Gain on sale of real estate |
339,024 |
|
|
— |
|
|
— |
|
Income from discontinued operations |
$ |
354,418 |
|
|
$ |
24,477 |
|
|
$ |
23,180 |
|
|
|
|
|
|
|
Basic net income per share |
$ |
4.39 |
|
|
$ |
0.31 |
|
|
$ |
0.30 |
|
Diluted net income per share |
$ |
4.39 |
|
|
$ |
0.31 |
|
|
$ |
0.30 |
|
|
|
|
|
|
|
Capital expenditures |
$ |
809 |
|
|
$ |
2,138 |
|
|
$ |
1,601 |
|
All assets related to the Retail Portfolio were sold as of December 31, 2019. As of December 31, 2018, assets related to the Retail Portfolio were as follows (in thousands):
|
|
|
|
|
Land |
$ |
88,087 |
|
Income producing property |
216,577 |
|
|
304,664 |
|
Accumulated depreciation and amortization |
(101,254 |
) |
Income producing property, net |
203,410 |
|
Rents and other receivables |
9,898 |
|
Prepaid expenses and other assets |
8,653 |
|
Total assets |
$ |
221,961 |
|
All liabilities related to the Retail Portfolio were sold as of December 31, 2019. As of December 31, 2018, liabilities related to the Retail Portfolio were as follows (in thousands):
|
|
|
|
|
Mortgage notes payable, net |
$ |
11,515 |
|
Accounts payable and other liabilities |
1,620 |
|
Advance rents |
1,771 |
|
Tenant security deposits |
612 |
|
Liabilities related to properties sold or held for sale |
$ |
15,518 |
|
|