Segment Reporting

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

We have four reportable operating segments at September 30, 2013, the first three of which consist of the ownership and rental of (i) industrial, (ii) office and (iii) medical office real estate investments. The operations of our industrial, office and medical office properties, along with our retail properties, are collectively referred to as "Rental Operations." Our retail properties, as well as any other properties not included in our reportable segments, do not by themselves meet the quantitative thresholds for separate presentation as a reportable segment. The fourth reportable segment consists of various real estate services such as property management, asset management, maintenance, leasing, development, general contracting and construction management to third-party property owners and joint ventures, and is collectively referred to as "Service Operations." Our reportable segments offer different products or services and are managed separately because each segment requires different operating strategies and management expertise.

We assess and measure the overall operating results of the General Partner and the Partnership based upon Funds From Operations ("FFO"), which is an industry performance measure that management believes is a useful indicator of consolidated operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. The National Association of Real Estate Investment Trusts ("NAREIT") created FFO as a non-GAAP supplemental measure of REIT operating performance. FFO, as defined by NAREIT, represents GAAP net income (loss), excluding extraordinary items as defined under GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization, and after similar adjustments for unconsolidated partnerships and joint ventures. The most comparable GAAP measure is net income (loss) attributable to common shareholders or common unitholders. FFO attributable to common shareholders or common unitholders should not be considered as a substitute for net income (loss) attributable to common shareholders or common unitholders or any other measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. FFO is calculated in accordance with the definition that was adopted by the Board of Governors of NAREIT. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Management believes that the use of FFO attributable to common shareholders or common unitholders, combined with net income (which remains the primary measure of performance), improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful. Management believes that the use of FFO as a performance measure enables investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT's activity and assist them in comparing these operating results between periods or between different companies.

Other revenue consists of other operating revenues not identified with one of our operating segments. We do not allocate interest expense and certain other non-property specific revenues and expenses ("Non-Segment Items," as shown in the table below) to our individual operating segments in determining our performance measure. Thus, the operational performance measure presented here on a segment-level basis represents net earnings, excluding depreciation expense and the Non-Segment Items not allocated, and is not meant to present FFO as defined by NAREIT. The following table shows (i) the revenues for each of the reportable segments and (ii) a reconciliation of FFO attributable to common shareholders or common unitholders to net income (loss) attributable to common shareholders or common unitholders for the three and nine months ended September 30,2013 and 2012, respectively (in thousands): 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Revenues
Rental Operations:
Industrial	$	123,749	$	107,345	$	357,777	$	321,524
Office	66,691		65,290		198,890		194,038
Medical Office	35,093		21,108		101,733		59,336
Non-reportable Rental Operations	1,765		1,429		5,807		5,276
Service Operations	62,807		93,932		161,004		226,507
Total segment revenues	290,105		289,104		825,211		806,681
Other revenue	1,585		4,154		4,023		6,396
Consolidated revenue from continuing operations	291,690		293,258		829,234		813,077
Discontinued operations	3,912		9,774		18,419		32,868
Consolidated revenue	$	295,602	$	303,032	$	847,653	$	845,945

Reconciliation of Funds From Operations
Net earnings excluding depreciation and Non-Segment Items:
Industrial	$	92,052		$	79,803		$	266,044		$	240,605
Office	38,842			37,193			116,385			113,425
Medical Office	23,533			13,756			67,976			38,842
Non-reportable Rental Operations	1,150			806			3,853			3,644
Service Operations	3,415			6,213			18,079			16,988
	158,992			137,771			472,337			413,504
Non-Segment Items:
Interest expense	(58,100		)	(58,812		)	(176,005		)	(175,726		)
Impairment charges on non-depreciable properties	—			—			(3,777		)	—
Interest and other income, net	145			150			1,219			394
Other operating expenses	(47		)	(130		)	(150		)	(591		)
General and administrative expenses	(10,373		)	(8,934		)	(33,225		)	(32,367		)
Gain on land sales	3,365			—			3,365			—
Undeveloped land carrying costs	(2,108		)	(2,140		)	(6,837		)	(6,606		)
Acquisition-related activity	(726		)	(954		)	(2,506		)	(2,563		)
Income tax benefit	4,500			103			4,500			103
Other non-segment income	(32		)	3,278			490			4,119
Net income attributable to noncontrolling interests - consolidated entities not wholly owned by the Partnership	(140		)	(59		)	(487		)	(365		)
Joint venture items	6,945			8,997			22,212			27,999
Dividends on preferred shares/Preferred Units	(7,356		)	(11,081		)	(24,261		)	(35,356		)
Adjustments for redemption of preferred shares/Preferred Units	—			—			(5,932		)	(5,730		)
Discontinued operations	1,745			2,967			6,756			11,204
FFO attributable to common unitholders of the Partnership	96,810			71,156			257,699			198,019
Net (income) loss attributable to noncontrolling interests - common limited partnership interests in the Partnership	92			459			(1,142		)	1,736
Noncontrolling interest share of FFO adjustments	(1,384		)	(1,638		)	(2,339		)	(5,358		)
FFO attributable to common shareholders of the General Partner	95,518			69,977			254,218			194,397
Depreciation and amortization on continuing operations	(103,594		)	(90,202		)	(296,791		)	(264,435		)
Depreciation and amortization on discontinued operations	(844		)	(4,937		)	(6,686		)	(15,903		)
Company's share of joint venture adjustments	(7,127		)	(8,782		)	(20,730		)	(26,008		)
Gains on depreciated property sales on continuing operations	—			403			1,108			245
Gains on depreciated property sales on discontinued operations	8,441			1,608			101,052			11,179
Gains on depreciated property sales - share of joint venture	155			2,065			48,960			2,065
Noncontrolling interest share of FFO adjustments	1,384			1,638			2,339			5,358
Net income (loss) attributable to common shareholders of the General Partner	$	(6,067	)	$	(28,230	)	$	83,470		$	(93,102	)
Add back: Net income (loss) attributable to noncontrolling interests - common limited partnership interests in the Partnership	(92		)	(459		)	1,142			(1,736		)
Net income (loss) attributable to common unitholders of the Partnership	$	(6,159	)	$	(28,689	)	$	84,612		$	(94,838	)

The assets for each of the reportable segments at September 30, 2013 and December 31, 2012 were as follows (in thousands):

	September 30, 2013		December 31, 2012
Assets
Rental Operations:
Industrial	$	4,293,447	$	3,836,721
Office	1,672,180		1,683,314
Medical Office	1,270,802		1,202,929
Non-reportable Rental Operations	84,619		175,197
Service Operations	154,672		162,219
Total segment assets	7,475,720		7,060,380
Non-segment assets	411,119		499,721
Consolidated assets	$	7,886,839	$	7,560,101