-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ShI00Mwc5wwfqVQRMZkUr+cNzcpTguTqF+SxQAvYVZL3K68PyyZVT+gnRG3WSl6y z3qla6s9wzAiKGqVE1fPpw== 0001021408-01-500276.txt : 20010424 0001021408-01-500276.hdr.sgml : 20010424 ACCESSION NUMBER: 0001021408-01-500276 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010423 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010423 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WASHINGTON REAL ESTATE INVESTMENT TRUST CENTRAL INDEX KEY: 0000104894 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 530261100 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-06622 FILM NUMBER: 1608925 BUSINESS ADDRESS: STREET 1: 6110 EXECUTIVE BOULEVARD STREET 2: SUITE 800 CITY: ROCKVILLE STATE: MD ZIP: 20852 BUSINESS PHONE: 3019295900 MAIL ADDRESS: STREET 1: 6110 EXECUTIVE BOULEVARD STREET 2: SUITE 800 CITY: ROCKVILLE STATE: MD ZIP: 20852 8-K 1 d8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) APRIL 23, 2001 -------------------- WASHINGTON REAL ESTATE INVESTMENT TRUST - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Maryland 1-6622 53-0261100 - -------------------------------------------------------------------------------- (State or other jurisdiction of (Commission File (IRS Employer incorporation) Number) Identification Number) 6110 Executive Boulevard, Suite 800, Rockville, Maryland 20852 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (301) 984- 9400 -------------------- Item 5: OTHER EVENTS Attached hereto as Exhibit 99.1 is a copy of certain Supplemental Data included in the Trust's press release, dated April 23, 2001. Item 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits Exhibit Number ------ 99.1 Press Release, April 23, 2001, entitled "Supplemental Data" SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WASHINGTON REAL ESTATE INVESTMENT TRUST --------------------------------------- (Registrant) By: /s/ Larry E. Finger ------------------------------- (Signature) Larry E. Finger Senior Vice President Chief Financial Officer April 23, 2001 -------------- (Date) Exhibit Number - ------ 99.1 Press Release, April 23, 2001, entitled "Supplemental Data" EX-99.1 2 dex991.txt PRESS RELEASE Exhibit 99.1 [LETTERHEAD OF WASHINGTON REAL ESTATE INVESTMENT TRUST] NEWS RELEASE FOR IMMEDIATE RELEASE April 23, 2001 Page 1 of 8 WASHINGTON REAL ESTATE INVESTMENT TRUST 1/st/ Quarter 2001 Funds From Operation Up 14% Washington Real Estate Investment Trust (WRIT) reported today that Funds From Operations (FFO) increased 14.1% to $16,942,000 for the quarter ended March 31, 2001 from $14,842,000 for the quarter ended March 31, 2000. FFO per share increased 11.9% to $0.47 in the first quarter of 2001 from $0.42 in the first quarter of 2000. FFO is the primary performance measure for the REIT industry. Edmund B. Cronin, Jr., Chairman, President and CEO, stated that, "WRIT's strong FFO growth is due to the excellent performance of recent acquisitions, combined with the strong core portfolio net operating income increase of 8.6% for the quarter ended March 31, 2001." WRIT's core portfolio excludes properties not owned for the entirety of both periods being compared. WRIT is a self-administered, self-managed, equity real estate investment trust investing in income-producing properties in the greater Washington-Baltimore region. The Trust owns a diversified portfolio of 59 properties consisting of 10 retail centers, 24 office properties, 15 industrial properties and 10 multifamily properties. WRIT's streak of 35 consecutive years of increased earnings per share and 28 consecutive years of increased FFO per share growth spans 4 recessions. WRIT's dividends have increased every year for 30 consecutive years. During these 30 years, WRIT's dividends have increased 36 times, a record unmatched by any other publicly traded real estate investment trust. WRIT shares are publicly traded on the New York Stock Exchange (symbol: WRE). 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 and changes in general and local economic and real estate market conditions and the timing and pricing of lease transactions. CONTINUED FOR IMMEDIATE RELEASE April 23, 2001 Page 2 of 7 WASHINGTON REAL ESTATE INVESTMENT TRUST FINANCIAL HIGHLIGHTS (in thousands except per share data)
Quarter Ended March 31, ----------------------- OPERATING RESULTS 2001 2000 - --------------------------------------------- ------------- -------------- Real estate rental revenue $ 35,324 $ 31,935 Real estate expenses (10,239) (9,372) ------------ ------------ 25,085 22,563 Real estate depreciation and amortization (6,214) (5,430) ------------ ------------ Income from real estate $ 18,871 $ 17,133 Other income 199 149 Interest expense (6,676) (6,090) General and administrative (1,666) (1,780) ------------ ------------ Income before gain on sale of real estate $ 10,728 $ 9,412 Gain on sale of real estate - 1,498 ------------ ------------ Net Income $ 10,728 $ 10,910 ============ ============ Income before gain on real estate per share (Basic) $ 0.30 $ 0.26 ============ ============ Income before gain on real estate per share (Diluted) $ 0.30 $ 0.26 ============ ============ Net income per share (Basic) $ 0.30 $ 0.31 ============ ============ Net income per share (Diluted) $ 0.30 $ 0.31 ============ ============ Income before gain on sale of real estate $ 10,728 $ 9,412 Real estate depreciation and amortization 6,214 5,430 ------------ ------------ Funds from operations $ 16,942 $ 14,842 ============ ============ Funds from operations per share (Basic) $ 0.47 $ 0.42 ============ ============ Funds from operations per share (Diluted) $ 0.47 $ 0.42 ============ ============ Dividends paid per share $ .3125 $ 0.2925 ============ ============ Weighted average shares outstanding 35,777,563 35,733,793 Fully diluted weighted average shares outstanding 36,163,873 35,763,470
As of As of BALANCE SHEET DATA March 31, 2001 December 31, 2000 - ------------------ --------------------- ----------------------- Cash and temporary investments $ 5,075 $ 6,426 Real estate assets, at cost (1) 702,157 698,513 Total assets, at cost (1) 736,404 732,953 Lines of credit payable 0 0 Mortgage notes payable 86,057 86,260 Notes payable 265,000 265,000 Total liabilities 369,240 371,833 Shareholders' equity 258,967 258,656 Shareholders' equity, at cost (1) 365,593 359,562
(1) At cost means adding back accumulated depreciation CONTINUED Washington Real Estate Investment Trust Q1 2001 Supplemental Disclosures Page 3 of 7 WRIT Continues to Produce Significantly Higher FFO Per Share Growth Than the - ---------------------------------------------------------------------------- REIT Industry - ------------- As reflected in the following graph, WRIT's FFO per share growth, as compared to the corresponding quarter in the preceding calendar year, continues to significantly outperform the industry. WRIT vs. REIT Industry FFO Per Share Growth Over Last 8 Quarters [GRAPH]
REIT WRIT INDUSTRY ---- -------- Q2 1999 11.7% 8.8% Q3 1999 11.8% 8.2% Q4 1999 13.6% 7.9% Q1 2000 12.2% 8.4% Q2 2000 10.6% 8.5% Q3 2000 15.8% 7.9% Q4 2000 15.0% 7.5% Q1 2001 12.5% N/A Average 12.9% 8.2%
*WRIT growth is shown excluding accounting change to straight-line rents in Q4 1999. The Q2 2001 straight-line rents were $0.6 million net of reserves. **REIT Industry data for Q2 1999 through Q4 2000 is actual FFO per share growth per Credit Suisse First Boston Equity REIT Research. Q1 2001 Industry data is not yet available and, therefore, the industry average is the seven quarter average from Q2 1999 through Q4 2000. Core Portfolio Operating Income (NOI) Growth and Rental Rate Growth - Q1 2001 - ----------------------------------------------------------------------------- vs. Q1 2000 - -----------
Including Straight Line Rents Excluding Straight Line Rents ----------------------------- ----------------------------- Rental Rate Rental Rate ----------- ----------- NOI Growth Growth NOI Growth Growth ---------- ------ ---------- ------ Sector ------ Apartments 7.5% 7.8% 7.3% 7.7% Office Buildings 6.4% 5.2% 5.8% 4.9% Retail Centers 9.1% 6.8% 8.0% 5.8% Industrial/Flex Centers 17.1% 10.6% 13.1% 7.2% ---- ---- ---- --- Overall Core Portfolio 8.6% 6.6% 7.5% 5.9%
Core portfolio operating expenses increased 5.9% in Q1 2001 vs. Q1 2000. CONTINUED Washington Real Estate Investment Trust Q1 2001 Supplemental Disclosures Page 4 of 7 Core Portfolio & Overall Occupancy Levels By Sector - ---------------------------------------------------
Core Portfolio All Properties ------------------------------------------------------------------ 1st QTR 1st QTR 1st QTR 1st QTR Sector 2001 2000 2001 2000 - ------ ---- ---- ---- ---- Apartments 94.9% 97.1% 94.9% 97.1% Office Buildings 98.3% 97.2% 98.0% 97.2% Retail Centers 96.0% 94.9% 96.0% 94.6% Industrial/Flex Centers 98.4% 95.4% 98.4% 95.4% ---- ---- ---- ---- Overall Portfolio 97.3% 96.7% 97.2% 96.6%
WRIT Continues to Produce Significantly Higher Core Portfolio NOI Growth Than - ----------------------------------------------------------------------------- the REIT Industry - ----------------- As reflected in the following graph, WRIT's core portfolio NOI growth, as compared to the corresponding quarter in the preceding calendar year, continues to significantly outperform the industry. WRIT vs. REIT Industry Core Portfolio NOI Growth Over Last 8 Quarters [GRAPH] REIT WRIT INDUSTRY ---- -------- Q2 1999 8.6% 5.3% Q3 1999 6.8% 5.4% Q4 1999 7.4% 5.6% Q1 2000 9.3% 6.2% Q2 2000 7.4% 6.3% Q3 2000 10.4% 6.8% Q4 2000 8.2% 6.8% Q1 2001 7.5% N/A Average 8.2% 6.1%
*WRIT growth is shown excluding accounting change to straight-line rents in Q4 1999. The Q1 2001 core portfolio straight-line rents were $0.6 million net of reserves. **REIT Industry Same Store NOI growth data is per Salomon Smith Barney Equity REIT Research. Q1 2001 Industry data is not yet available and, therefore, the industry average is the seven quarter average from Q2 1999 through Q4 2000. CONTINUED Washington Real Estate Investment Trust Q1 2001 Supplemental Disclosures Page 5 of 7 Straight Line Rents - ------------------- The following disclosure is provided to improve comparability between Q1 2001 and prior quarters (all amounts except per share amounts are in $000's):
Including Straight Line Excluding Straight Line Rents Rents ------------------------------------------------------------------------- 1st QTR 1st QTR 1st QTR 1st QTR 2001 2000 2001 2000 ---- ---- ---- ---- Straight Line Rent Adjustment 635 367 N/A N/A FFO 16,942 14,842 16,307 14,475 FFO Per Share $ 0.473 $ 0.415 $ 0.456 $ 0.405 Nominal FFO Per Share Growth 11.9% 12.5% Unrounded FFO Per Share Growth 14.0% 12.6 Core Portfolio Operating Income (NOI) Growth 8.6% 7.5%
Q1 2001 Commercial Leasing Activity - ----------------------------------- In Q1 2001, WRIT executed leases for 162,000 square feet of commercial space at a weighted average increase over the prior rent in place of 21.1% on a straight line basis and 14.0% on a cash basis. Details by sector are as follows:
Cash Basis Cash Basis Cash Basis Straight Line Previous New ---------- ------------- Sector Square Feet Face Rent Face Rent % Increase % Increase - ------ ----------- ---------- --------- ---------- ---------- Office 87,015 $23.20 $26.36 13.6% 22.6% Retail 26,720 10.20 12.17 19.3% 19.2% Industrial/Flex 48,185 5.69 6.35 11.6% 12.8% ------- ------ ------ ---- ---- Overall 161,920 $15.84 $18.07 14.0% 21.1%
Avg Term Avg Tenant Sector (Years) Imp/SF - ------ ------- ------ Office 3.7 $ 4.49 Retail 1.8 .56 Industrial/Flex 2.5 .48 --- ------ Overall 3.0 $ 2.65 CONTINUED Washington Real Estate Investment Trust Q1 2001 Supplemental Disclosures Page 6 of 7 Capital Improvements Summary - ---------------------------- During Q1 2001, WRIT invested $3.2 million in real estate capital improvements. A breakdown of these improvements is as follows (in 000's): Accretive Capital Improvements Acquisition Related $ 544 Expansions & Major Renovations 18 Tenant Improvements 938 ------ Total Accretive Capital Improvements 1,500 Recurring Capital Improvements 1,705 ------ Total Capital Improvements $3,205 Leasing Commissions Capitalized $ 290 March 31, 2001 Debt Summary - --------------------------- At March 31, 2001, WRIT's debt was as follows (in $millions): Wtd Avg Wtd Avg Amount Maturity (Yrs) Interest Rate ------ -------------- ------------- Secured $ 86.1 6.6 7.5% Senior Notes & MTNs $265.0 8.3 7.4% -------------------------------------- Subtotal $351.1 8.5 7.4% Lines of Credit* $ 0 -------------------------------------- Total Debt $351.1 8.5 7.4% *WRIT's Lines of Credit total $75 million of capacity at LIBOR+ 70bp. On April 19, 2001 WRIT borrowed $43 million under its line of credit for the acquisition of One Central Plaza ($44.4 million purchase price). No more than $60 million of debt matures in any one year and less than $1 million matures in each year until 2003. Supplemental Debt Information at March 31, 2001 - ----------------------------------------------- Debt to Total Market Capitalization: 29.4% Earnings to Fixed Charges Ratio: 3.42x Debt Service Coverage Ratio: 3.42x CONTINUED Washington Real Estate Investment Trust Q1 2001 Supplemental Disclosures Page 7 of 7 REIT Industry Issues - -------------------- In light of recent issues raised in the REIT industry, WRIT makes the following disclosures: 1. WRIT has no non-income producing land held for development. 2. WRIT has only one theatre lease in its portfolio. This lease runs through 6/30/02 at rent that WRIT estimates to be less than 1/3 of current market rent. Conference Call Information - --------------------------- WRIT will conduct a Conference Call to discuss 1st Quarter Earnings on Tuesday, April 24, 2001 at 11:00 A.M. Eastern Standard Time. Conference Call access information is as follows: USA Toll Free Number: 888-928-9529 International Toll Number: 312-470-0116 Pass Code: Washington REIT Conference Leader: Mr. Larry Finger A replay of the Conference Call will be available for two weeks commencing one hour after the Conference Call concludes until May 8, 2001 at 5:00 P.M. Eastern Standard Time. Instant Replay access information is as follows: USA Toll Free Number: 800-627-3229 International Toll Number: 402-220-0226 A live on-demand webcast of the Conference Call will also be available on WRIT's website at www.writ.com. An on-line playback of the webcast will be available ------------ at www.writ.com for 30 days following the Conference Call. ------------ END -----END PRIVACY-ENHANCED MESSAGE-----