Reportable Segments

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

REPORTABLE SEGMENTS

REPORTABLE SEGMENTS

The Company's segments are based on its method of internal reporting, which classifies operations by property type and geographical area. The segments by property type are: Office and Mixed-Use. The segments by geographical region are: Atlanta, Austin, Charlotte, Dallas, Phoenix, Tampa, and Other. Included in Other is a property in Cherry Hill, New Jersey that was sold in February 2020 and properties located in Chapel Hill, Fort Worth, and Houston. These reportable segments represent an aggregation of operating segments reported to the Chief Operating Decision Maker based on similar economic characteristics that include the type of property and the geographical location. Each segment includes both consolidated operations and the Company's share of unconsolidated joint venture operations.

Company management evaluates the performance of its reportable segments in part based on net operating income (“NOI”). NOI represents rental property revenues, less termination fees, less rental property operating expenses. NOI is not a measure of cash flows or operating results as measured by GAAP, is not indicative of cash available to fund cash needs, and should not be considered an alternative to cash flows as a measure of liquidity. All companies may not calculate NOI in the same manner. The Company considers NOI to be an appropriate supplemental measure to net income as it helps both management and investors understand the core operations of the Company's operating assets. NOI excludes corporate general and administrative expenses, interest expense, depreciation and amortization, impairments, gains/loss on sales of real estate, and other non-operating items.

Segment net income, amount of capital expenditures, and total assets are not presented in the following tables because management does not utilize these measures when analyzing its segments or when making resource allocation decisions. Information on the Company's segments along with a reconciliation of NOI to net income for the three and nine months ended September 30, 2020 and 2019 are as follows (in thousands):

Three Months Ended September 30, 2020	Office		Mixed-Use		Total
Revenues:
Atlanta	$	64,677	$	175	$	64,852
Austin	52,008		—		52,008
Charlotte	20,370		—		20,370
Dallas	4,601		—		4,601
Phoenix	12,689		—		12,689
Tampa	13,179		—		13,179
Other	16,354		1,193		17,547
Total segment revenues	183,878		1,368		185,246
Less: Company's share of rental property revenues from unconsolidated joint ventures	(4,854)		(1,368)		(6,222)
Total rental property revenues	$	179,024	$	—	$	179,024

Three Months Ended September 30, 2019	Office		Mixed-Use		Total
Revenues:
Atlanta	$	60,486	$	—	$	60,486
Austin	50,614		—		50,614
Charlotte	34,762		—		34,762
Dallas	4,274		—		4,274
Phoenix	12,754		—		12,754
Tampa	14,335		—		14,335
Other	17,290		1,101		18,391
Total segment revenues	194,515		1,101		195,616
Less: Company's share of rental property revenues from unconsolidated joint ventures	(13,689)		(1,101)		(14,790)
Total rental property revenues	$	180,826	$	—	$	180,826

Nine Months Ended September 30, 2020	Office		Mixed-Use		Total
Revenues
Atlanta	$	193,012	$	339	$	193,351
Austin	155,009		—		155,009
Charlotte	75,411		—		75,411
Dallas	13,559		—		13,559
Phoenix	37,932		—		37,932
Tampa	40,203		—		40,203
Other	46,092		3,631		49,723
Total segment revenues	561,218		3,970		565,188
Less: Company's share of rental property revenues from unconsolidated joint ventures	(17,966)		(3,970)		(21,936)
Total rental property revenues	$	543,252	$	—	$	543,252

Nine Months Ended September 30, 2019	Office		Mixed-Use		Total
Revenues:
Atlanta	$	177,455	$	—	$	177,455
Austin	110,521		—		110,521
Charlotte	85,258		—		85,258
Dallas	5,078				5,078
Phoenix	38,562		—		38,562
Tampa	40,776		—		40,776
Other	21,416		3,378		24,794
Total segment revenues	479,066		3,378		482,444
Less: Company's share of rental property revenues from unconsolidated joint ventures	(39,442)		(3,378)		(42,820)
Total rental property revenues	$	439,624	$	—	$	439,624

NOI by reportable segment for the three and nine months ended September 30, 2020 and 2019 are as follows (in thousands):

Three Months Ended September 30, 2020	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	43,360	$	28	$	43,388
Austin	31,639		—		31,639
Charlotte	14,621		—		14,621
Dallas	3,688		—		3,688
Phoenix	9,205		—		9,205
Tampa	8,230		—		8,230
Other	8,483		762		9,245
Total Net Operating Income	$	119,226	$	790	$	120,016

Three Months Ended September 30, 2019	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	38,926	$	—	$	38,926
Austin	29,452		—		29,452
Charlotte	21,692		—		21,692
Dallas	3,416		—		3,416
Phoenix	8,913		—		8,913
Tampa	8,309		—		8,309
Other	9,266		668		9,934
Total Net Operating Income	$	119,974	$	668	$	120,642

Nine Months Ended September 30, 2020	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	129,924	$	(45)	$	129,879
Austin	92,161		—		92,161
Charlotte	51,214		—		51,214
Dallas	10,907		—		10,907
Phoenix	27,920		—		27,920
Tampa	24,372		—		24,372
Other	26,008		2,469		28,477
Total Net Operating Income	$	362,506	$	2,424	$	364,930

Nine Months Ended September 30, 2019	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	115,692	$	—	$	115,692
Austin	63,977		—		63,977
Charlotte	55,550		—		55,550
Dallas	4,086		—		4,086
Phoenix	27,694		—		27,694
Tampa	24,869		—		24,869
Other	11,678		2,244		13,922
Total Net Operating Income	$	303,546	$	2,244	$	305,790

The following reconciles Net Operating Income to net income for each of the periods presented (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net Operating Income	$	120,016	$	120,642	$	364,930	$	305,790
Net operating income from unconsolidated joint ventures	(4,208)		(9,037)		(14,436)		(26,289)
Fee income	4,350		7,494		13,772		23,298
Termination fee income	372		3,575		3,755		4,285
Other income	6		3		169		154
Reimbursed expenses	(373)		(1,290)		(1,216)		(3,269)
General and administrative expenses	(5,658)		(5,852)		(19,853)		(25,686)
Interest expense	(15,058)		(14,700)		(44,955)		(37,579)
Depreciation and amortization	(71,498)		(82,012)		(215,980)		(178,777)
Acquisition and transaction costs	—		(1,048)		(428)		(50,878)
Other expenses	(723)		(297)		(1,841)		(1,101)
Income from unconsolidated joint ventures	1,611		3,241		6,751		9,779
Gain (loss) on sales of investments in unconsolidated joint ventures	(59)		—		45,940		—
Gain (loss) on investment property transactions	(523)		(27)		90,192		14,388
Net income	$	28,255	$	20,692	$	226,800	$	34,115