Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.21.2
Segment Information
6 Months Ended
Jun. 30, 2021
Segment Reporting [Abstract]  
Segment Information SEGMENT INFORMATION
We previously had two reportable segments: office and multifamily. Office properties provide office space for various types of businesses and professions. Multifamily properties provide rental housing for individuals and families throughout the Washington, DC metro region. We have eight retail properties that did not meet the criteria for a reportable segment and are classified as “Corporate and other” in our segment disclosure tables. During the 2021 Quarter, we executed a purchase and sale agreement for the sale of twelve office properties (see note 3). Subsequent to the 2021 Quarter, we executed a purchase and sale agreement for the sale of eight retail properties (see note 3). Both the office and retail properties met the criteria for classification as held for sale as of June 30, 2021 and are classified as discontinued operations. We closed on the sale of the Office Portfolio on July 26, 2021 and expect to close on the Retail Portfolio in the third quarter of 2021. We have one remaining office property, Watergate 600, which does not meet the criteria for a reportable segment, has been classified within “Corporate and other” on our segment disclosure tables.

We evaluate performance based upon net operating income of the combined properties in each segment. Our reportable operating segments are consolidations of similar properties. GAAP requires that segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing each segment’s performance. Net operating income is a key measurement of our segment profit and loss and is defined as real estate rental revenue less real estate expenses.
The following tables present revenues, net operating income, capital expenditures and total assets for the three and six months ended June 30, 2021 and 2020 from our Multifamily segment as well as Corporate and Other, and reconcile net operating income of our reportable segments to net loss as reported (in thousands):
  Three Months Ended June 30, 2021
  Multifamily
Corporate and Other (1), (2)
Consolidated
Real estate rental revenue $ 36,862  $ 4,435  $ 41,297 
Real estate expenses 14,832  1,398  16,230 
Net operating income $ 22,030  $ 3,037  $ 25,067 
Depreciation and amortization (17,303)
General and administrative expenses (6,325)
Transformation costs (3,780)
Interest expense (10,158)
Other income 1,522 
Loss on interest rate derivatives (5,760)
Discontinued operations:
Income from operations of properties sold or held for sale 9,745 
Net loss $ (6,992)
Capital expenditures $ 4,062  $ 2,300  $ 6,362 
Total assets $ 1,315,640  $ 1,052,765  $ 2,368,405 

  Three Months Ended June 30, 2020
  Multifamily
Corporate and Other (1), (2)
Consolidated
Real estate rental revenue $ 36,066  $ 7,691  $ 43,757 
Real estate expenses 14,110  2,478  16,588 
Net operating income $ 21,956  $ 5,213  $ 27,169 
Depreciation and amortization (17,372)
General and administrative expenses (5,296)
Interest expense (8,751)
Loss on sale of real estate (7,539)
Loss on extinguishment of debt (206)
Discontinued operations:
Income from operations of properties sold or held for sale 6,589 
Net loss $ (5,406)
Capital expenditures $ 5,488  $ 9,118  $ 14,606 
Total assets $ 1,337,731  $ 1,204,991  $ 2,542,722 
Six Months Ended June 30, 2021
Multifamily
Corporate and Other (1), (2)
Consolidated
Real estate rental revenue $ 73,029  $ 8,875  $ 81,904 
Real estate expenses 30,004  2,680  32,684 
Net operating income $ 43,025  $ 6,195  $ 49,220 
Depreciation and amortization (34,290)
General and administrative (11,929)
Transformation costs (3,780)
Interest expense (20,281)
Other income 2,806 
Loss on interest rate derivatives (5,760)
Discontinued operations:
Income from operations of properties sold or held for sale 15,875 
Net loss $ (8,139)
Capital expenditures $ 7,799  $ 2,602  $ 10,401 

Six Months Ended June 30, 2020
Multifamily
Corporate and Other (1), (2)
Consolidated
Real estate rental revenue $ 72,651  $ 16,849  $ 89,500 
Real estate expenses 28,095  5,951  34,046 
Net operating income $ 44,556  $ 10,898  $ 55,454 
Depreciation and amortization (34,619)
General and administrative (11,633)
Interest expense (19,596)
Loss on sale of real estate (7,539)
Gain on extinguishment of debt 262 
Discontinued operations:
Income from operations of properties sold or held for sale 13,984 
Net loss $ (3,687)
Capital expenditures $ 8,957  $ 16,619  $ 25,576 
______________________________
(1)     Corporate and Other represents Watergate 600, an office property that does not meet the qualitative or quantitative criteria for a reportable segment.
(2)     Total assets and capital expenditures include office and retail properties classified as discontinued operations.