Annual report pursuant to Section 13 and 15(d)

Real Estate Investments (Tables)

v2.4.0.8
Real Estate Investments (Tables)
12 Months Ended
Dec. 31, 2013
Real Estate Investments, Net [Abstract]  
Investment
As of December 31, 2013 and 2012, our real estate investment portfolio, at cost, consists of properties as follows (in thousands):
 
December 31,
 
2013
 
2012
Office
$
1,296,967

 
$
1,261,534

Retail
415,899

 
411,948

Multifamily
389,361

 
331,901

 
$
2,102,227

 
$
2,005,383

Real Estate Portfolio in Development
The cost of our real estate portfolio under development or held for development as of December 31, 2013 and 2012 is as follows (in thousands):
 
December 31,
 
2013
 
2012
Office
$
12,175

 
$
8,922

Retail
495

 
587

Multifamily
48,645

 
35,761

 
$
61,315

 
$
45,270

Acquisition Of Properties and Land For Development

Our current strategy is focused on properties inside the Washington metro region’s Beltway, near major transportation nodes and in areas with strong employment drivers and superior growth demographics. We seek to upgrade our portfolio with acquisitions as opportunities arise. Properties and land for development acquired during the years ending December 31, 2013, 2012 and 2011 were as follows:
Acquisition Date
 
Property
 
Type
 
Rentable
Square  Feet
(unaudited)
 
Contract
Purchase  Price
(In thousands)
October 1, 2013
 
The Paramount (135 units)
 
Multifamily
 
N/A
 
$
48,200

 
 
 
 
Total 2013
 


 
$
48,200

 
 
 
 
 
 
 
 
 
June 21, 2012
 
Fairgate at Ballston
 
Office
 
142,000

 
$
52,250

 
 
 
 
Total 2012
 
142,000

 
$
52,250

 
 
 
 
 
 
 
 
 
January 11, 2011
 
1140 Connecticut Ave
 
Office
 
188,000

 
$
80,250

March 30, 2011
 
1227 25th Street
 
Office
 
132,000

 
47,000

June 15, 2011
 
650 North Glebe Road (1)
 
Mutifamily
 
N/A

 
11,800

August 30, 2011
 
Olney Village Center
 
Retail
 
198,000

 
58,000

September 13, 2011
 
Braddock Metro Center
 
Office
 
351,000

 
101,000

September 15, 2011
 
John Marshall II
 
Office
 
223,000

 
73,500

November 23, 2011
 
1225 First Street (1)
 
Mutifamily
 
N/A

 
13,850

 
 
 
 
Total 2011
 
1,092,000

 
$
385,400

(1) Land for development
Revenue and Earnings from Acquisitions
The revenue and earnings of our acquisitions during their year of acquisition for the three years ended December 31, 2013 are as follows (in thousands):
 
Year Ended December 31,
 
2013
 
2012
 
2011
Real estate rental revenue
$
907

 
$
3,358

 
$
20,944

Net (loss) income
(105
)
 
325

 
484

Total Purchase Price Of Acquisitions
We have recorded the total purchase price of the above acquisitions as follows (in thousands):
 
2013
 
2012
 
2011
Land
$
8,568

 
$
17,750

 
$
90,896

Buildings
37,930

 
26,893

 
219,613

Tenant origination costs
32

 
3,100

 
15,667

Leasing commissions/absorption costs
943

 
4,172

 
29,719

Net lease intangible assets
102

 
508

 
6,805

Net lease intangible liabilities
(117
)
 
(173
)
 
(2,454
)
Fair value of assumed mortgage

 

 
(78,500
)
Furniture, fixtures & equipment
742

 

 

Total
$
48,200

 
$
52,250

 
$
281,746

Land and Capitalized Development Costs
We include the joint venture land acquisitions and related capitalized development costs on our consolidated balance sheets in properties under development or held for development, consistent with other development activity. As of December 31, 2013 and 2012, the land and capitalized development costs were as follows (in thousands):
 
December 31,
 
2013
 
2012
650 North Glebe Road
$
27,343

 
$
15,646

1225 First Street
20,788

 
19,807

Schedule Of Accounts Payable and Accrued Liabilities Of Joint Ventures
As of December 31, 2013 and 2012, the accounts payable and accrued liabilities related to the joint ventures were as follows (in thousands):
 
December 31,
 
2013
 
2012
650 North Glebe Road
$
1,785

 
$
115

1225 First Street
39

 
1,676

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures
The impact of the sale on our medical office segment on revenues and net income is summarized as follows (in thousands, except per share data):
 
December 31,
 
2013
 
2012
 
2011
Real estate revenues
$
41,012

 
$
44,674

 
$
44,431

Net income
14,044

 
8,128

 
10,393

Basic net income per share
0.21

 
0.12

 
0.16

Diluted net income per share
0.21

 
0.12

 
0.16


During 2011, we sold our industrial segment, the impact of the disposal on revenues and net income for the three years ended December 31, 2013 were as follows (in thousands, except per share data):
 
Year Ended December 31,
 
2013
 
2012
 
2011
Real estate revenues
$

 
$

 
$
23,045

Net income

 

 
16,484

Basic net income per share

 

 
0.23

Diluted net income per share

 

 
0.23

Schedule of Dispositions
During the three years ended December 31, 2013, we sold the following properties (in thousands):
Disposition Date
Property
Type
Gain on Sale
March 19, 2013
Atrium Building
Office
$
3,195

November 2013
Medical Office Portfolio Transactions I & II (1)
Medical Office / Office
18,949

 
 
Total 2013
$
22,144

 
 
 
 
August 31, 2012
1700 Research Boulevard
Office
$
3,724

December 20, 2012
Plumtree Medical Center
Medical Office
1,400

 
 
Total 2012
$
5,124

 
 
 
 
April 5, 2011
Dulles Station, Phase I
Office
$

October - November 2011
Industrial Portfolio (2)
Office/Industrial
97,491

 
 
Total 2011
$
97,491

(1) 2440 M Street, 15001 Shady Grove Road, 15505 Shady Grove Road, 19500 at Riverside Park (formerly Lansdowne Medical Office Building), 9707 Medical Center Drive, CentreMed I and II, 8301 Arlington Boulevard, Sterling Medical Office Building, Shady Grove Medical Village II, Alexandria Professional Center, Ashburn Farm Office Park I, Ashburn Farm Office Park II, Ashburn Farm Office Park III, Woodholme Medical Office Building, two office properties (6565 Arlington Boulevard and Woodholme Center) and undeveloped land at 4661 Kenmore Avenue. Subsequent to the end of 2013, we closed on Transaction III, consisting of Woodburn Medical Park I and II, and Transaction IV, consisting of Prosperity Medical Center I, II and III (see note 17).

(2) The Industrial Portfolio consists of every property in our industrial segment and two office properties (the Crescent and Albemarle Point).
We sold or classified as held for sale the following properties during the three years ended December 31, 2013:
Property
 
Type
 
Rentable
Square Feet
(unaudited)
 
Contract
Sales Price
(in thousands)
 
Gain on Sale
(in thousands)
Atrium Building
 
Office
 
79,000

 
$
15,750

 
$
3,195

Medical Office Portfolio Transactions I & II
 
Medical Office / Office
 
1,093,000

 
307,189

 
18,949

Medical Office Portfolio Transactions III & IV
 
Medical Office
 
427,000

 
193,561

 
N/A

 
 
Total 2013
 
1,599,000

 
$
516,500

 
$
22,144

 
 
 
 
 
 
 
 
 
1700 Research Boulevard
 
Office
 
101,000

 
$
14,250

 
$
3,724

Plumtree Medical Center
 
Medical Office
 
33,000

 
8,750

 
1,400

 
 
Total 2012
 
134,000

 
$
23,000

 
$
5,124

 
 
 
 
 
 
 
 
 
Industrial Portfolio
 
Industrial/Office
 
3,092,000

 
$
350,900

 
$
97,491

Dulles Station, Phase I
 
Office
 
180,000

 
58,800

 

 
 
Total 2011
 
3,272,000

 
$
409,700

 
$
97,491

     
Disclosure of Long Lived Assets Held-for-sale
As of December 31, 2013 and 2012, investment in real estate for properties sold or held for sale were as follows (in thousands):
 
December 31,
 
2013
 
2012
Office
$

 
$
71,605

Medical office
125,967

 
406,874

Total
$
125,967

 
$
478,479

Less accumulated depreciation
(46,066
)
 
(113,480
)
Investment in real estate sold or held for sale, net
$
79,901

 
$
364,999



As of December 31, 2013 and 2012, liabilities related to properties sold or held for sale were as follows (in thousands):
 
December 31,
 
2013
 
2012
Mortgage notes payable
$

 
$
23,945

Other liabilities
1,533

 
8,412

Liabilities related to properties sold or held for sale
$
1,533

 
$
32,357

Operating Results of Properties Classified as Discontinued Operations
Income from operations of properties sold or held for sale for the three years ended December 31, 2013 was as follows (in thousands):
 
December 31,
 
2013
 
2012
 
2011
Revenues
$
45,791

 
$
54,344

 
$
80,948

Property expenses
(17,039
)
 
(18,273
)
 
(25,265
)
Real estate impairment

 
(2,097
)
 
(599
)
Depreciation and amortization
(12,161
)
 
(18,827
)
 
(26,125
)
Interest expense
(1,196
)
 
(4,331
)
 
(5,545
)
 
$
15,395

 
$
10,816

 
$
23,414

Operating Income (Loss) By Property Classified As Discontinued Operations
Income from operations of properties sold or held for sale by property for the three years ended December 31, 2013 was as follows (in thousands):
 
 
 
Year Ending December 31,
Property
Segment
 
2013
 
2012
 
2011
Dulles Station, Phase I
Office
 
$

 
$

 
$
(468
)
Industrial Portfolio
Industrial/Office
 

 

 
10,621

1700 Research Boulevard
Office
 

 
225

 
651

Plumtree Medical Center
Medical Office
 

 
197

 
67

Atrium Building
Office
 
185

 
1,063

 
1,052

Medical Office Portfolio
Medical/Office
 
15,210

 
9,331

 
11,491

 
 
 
$
15,395

 
$
10,816

 
$
23,414