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Segment Information
 3 Months Ended
Mar. 31, 2015
Segment Reporting [Abstract]  
SEGMENT INFORMATION
SEGMENT INFORMATION
During the quarter ended March 31, 2015, the Company was managing its portfolio within seven segments: (1) Pennsylvania Suburbs, (2) Philadelphia Central Business District (CBD), (3) Metropolitan Washington, D.C., (4) New Jersey/Delaware, (5) Richmond, Virginia, (6) Austin, Texas and (7) California. The Pennsylvania Suburbs segment includes properties in Chester, Delaware, and Montgomery counties in the Philadelphia suburbs. The Philadelphia CBD segment includes properties located in the City of Philadelphia in Pennsylvania. The Metropolitan Washington, D.C. segment includes properties in Northern Virginia and southern Maryland. The New Jersey/Delaware segment includes properties in Burlington and Camden counties in New Jersey and in New Castle county in the state of Delaware. The Richmond, Virginia segment includes properties primarily in Albemarle, Chesterfield, Goochland and Henrico counties and one property in Durham, North Carolina. The Austin, Texas segment includes properties in the City of Austin, Texas. The California segment includes properties in Oakland, Concord and Carlsbad. The corporate group is responsible for cash and investment management, development of certain real estate properties during the construction period, and certain other general support functions.
The following tables provide selected asset information and results of operations of the Company's reportable segments (in thousands):
Real estate investments, at cost:
 
 
 
 
 
 
March 31, 2015
 
December 31, 2014
Philadelphia CBD
 
$
1,346,858

 
$
1,338,655

Pennsylvania Suburbs
 
1,178,408

 
1,178,470

Metropolitan Washington, D.C.
 
1,189,601

 
1,183,652

New Jersey/Delaware (a)
 
326,297

 
392,581

Richmond, Virginia
 
317,422

 
317,076

California (a)
 
119,271

 
193,258

 
 
$
4,477,857

 
$
4,603,692

Less: Assets held for sale (a)
 
136,802

 
27,436

      Operating Properties
 
$
4,614,659

 
$
4,631,128

 
 
 
 
 
Corporate
 
 
 
 
Construction-in-progress
 
$
231,224

 
$
201,360

Land inventory
 
$
90,945

 
$
90,603


(a)
On December 31, 2014, the Company was actively marketing for sale its Atrium I and Libertyview properties, comprised of two office properties located in the New Jersey/Delaware segment. As of December 31, 2014 the properties were classified as held for sale on the consolidated balance sheet. The properties were sold on January 8, 2015. See Note 3, "Real Estate Investments," for further information. The sale is not classified as a significant disposition under the accounting guidance for discontinued operations.
See Note 3, "Real Estate Investments," for further description of the five properties held for sale in the New Jersey/Delaware segment and one property held for sale in the California segment.

Net operating income:
 
 
 
 
 
 
 
 
 
 
 
 
Three-month periods ended
 
March 31,
 
2015
 
2014
 
Total revenue
 
Operating expenses (a)
 
Net operating income
 
Total revenue
 
Operating expenses (a)
 
Net operating income (loss)
Philadelphia CBD
$
52,973

 
$
(18,390
)
 
$
34,583

 
$
49,414

 
$
(18,443
)
 
$
30,971

Pennsylvania Suburbs
39,890

 
(14,585
)
 
25,305

 
40,574

 
(14,687
)
 
25,887

Metropolitan Washington, D.C.
27,406

 
(11,860
)
 
15,546

 
30,690

 
(11,957
)
 
18,733

New Jersey/Delaware
13,500

 
(7,868
)
 
5,632

 
15,625

 
(8,692
)
 
6,933

Richmond, Virginia
9,296

 
(4,272
)
 
5,024

 
8,867

 
(4,340
)
 
4,527

California
4,985

 
(2,438
)
 
2,547

 
4,602

 
(2,409
)
 
2,193

Austin, Texas (b)
934

 
(870
)
 
64

 
2,081

 
(1,176
)
 
905

Corporate
1,422

 
(415
)
 
1,007

 
261

 
(270
)
 
(9
)
Operating Properties
$
150,406

 
$
(60,698
)
 
$
89,708

 
$
152,114

 
$
(61,974
)
 
$
90,140


(a)
Includes property operating expense, real estate taxes and third party management expense.
(b)
On April 3, 2014, the Company contributed Four Points Centre to an unconsolidated real estate venture. Following the contribution of this property, there are no wholly owned properties in the Austin, Texas segment. Activity subsequent to the contribution is related to management fees and related expenses provided by the Company to the Austin Venture.

Unconsolidated real estate ventures:
 
 
 
 
 
 
 
Investment in real estate ventures, at equity
 
Equity in income (loss) of real estate ventures
 
As of
 
Three-month periods ended March 31,
 
March 31, 2015
 
December 31, 2014
 
2015
 
2014
Philadelphia CBD
$
29,164

 
$
27,137

 
$
(300
)
 
$
(21
)
Pennsylvania Suburbs
17,273

 
17,385

 
(6
)
 
32

Metropolitan Washington, D.C.
78,069

 
73,127

 
(50
)
 
67

New Jersey/Delaware
—

 
—

 
48

 
18

Richmond, Virginia
1,410

 
1,574

 
86

 
(45
)
Austin, Texas (a)
107,562

 
105,781

 
353

 
191

Total
$
233,478

 
$
225,004

 
$
131

 
$
242


(a)
Investment in real estate ventures does not include the $1.2 million negative investment balance in one real estate venture as of March 31, 2015 and December 31, 2014, which is included in other liabilities.
Net operating income (“NOI”) is defined as total revenue less property operating expenses, real estate taxes and third party management expenses. Segment NOI includes revenue, real estate taxes and property operating expenses directly related to operation and management of the properties owned and managed within the respective geographical region. Segment NOI excludes property level depreciation and amortization, revenue and expenses directly associated with third party real estate management services, expenses associated with corporate administrative support services, and inter-company eliminations. NOI also does not reflect general and administrative expenses, interest expenses, real estate impairment losses, depreciation and amortization costs, capital expenditures and leasing costs. Trends in development and construction activities that could materially impact the Company’s results from operations are also not reflected in NOI. All companies may not calculate NOI in the same manner. NOI is the measure that is used by the Company to evaluate the operating performance of its real estate assets by segment. The Company also believes that NOI provides useful information to investors regarding its financial condition and results of operations because it reflects only those income and expenses recorded at the property level. The Company believes that net income, as defined by GAAP, is the most appropriate earnings measure. The following is a reconciliation of consolidated NOI to consolidated net income (loss), as defined by GAAP:
 
Three-month periods ended March 31,
 
2015
 
2014
 
(unaudited, amounts in thousands)
Consolidated net operating income
$
89,708

 
$
90,140

Other income (expense):
 
 
 
Depreciation and amortization
(51,111
)
 
(52,570
)
General and administrative expenses
(8,636
)
 
(8,181
)
Interest income
750

 
385

Interest expense
(28,176
)
 
(31,844
)
Interest expense - amortization of deferred financing costs
(1,079
)
 
(1,189
)
Interest expense - financing obligation
(286
)
 
(272
)
Equity in income of real estate ventures
131

 
242

Net gain on disposition of real estate
9,019

 
—

Gain on sale of undepreciated real estate
—

 
1,187

Loss on real estate venture transactions
—

 
(135
)
Provision for impairment on assets held for sale
(1,726
)
 
—

Income (loss) from continuing operations
8,594

 
(2,237
)
Loss from discontinued operations
—

 
(8
)
Net income (loss)
$
8,594

 
$
(2,245
)