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SEGMENT INFORMATION
 3 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
SEGMENT INFORMATION
14. SEGMENT INFORMATION
As of March 31, 2023, the Company owns and manages properties within four segments: (1) Philadelphia Central Business District (“Philadelphia CBD”), (2) Pennsylvania Suburbs, (3) Austin, Texas and (4) Other. The Philadelphia CBD segment includes properties located in the City of Philadelphia, Pennsylvania. The Pennsylvania Suburbs segment includes properties in Chester, Delaware, and Montgomery counties in the Philadelphia suburbs. The Austin, Texas segment includes properties in the City of Austin, Texas. The Other segment includes properties located in the District of Columbia, Northern Virginia, Southern Maryland Camden County, New Jersey and New Castle County, Delaware. In addition to the four segments, 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. Land held for development and construction in progress is transferred to operating properties by region upon completion of the associated construction or project.
The Company’s segments are based on the Company’s method of internal reporting which classifies its operations by geographic area. Beginning on January 1, 2023, the properties that were historically part of the Metro Washington D.C. segment are reflected in the other reportable segment. The operations for the Metro Washington D.C. segment for the three months ended March 31, 2022 and real estate investments as of March 31, 2023 and December 31, 2022 as detailed below, have been included in the Other reportable segment. 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, 2023December 31, 2022
Philadelphia CBD$1,519,693 $1,517,801 
Pennsylvania Suburbs886,165 878,546 
Austin, Texas853,677 851,835 
Total Core Segments3,259,535 3,248,182 
Other372,960 369,058 
Operating Properties$3,632,495 $3,617,240 
Corporate
Right of use asset - operating leases, net$19,505 $19,664 
Construction-in-progress$236,040 $218,869 
Land held for development$67,923 $76,499 
Prepaid leasehold interests in land held for development, net$27,762 $35,576 
Net operating income:
Three Months Ended March 31,
20232022
Total revenueOperating expenses (a)Net operating incomeTotal revenueOperating expenses (a)Net operating income
Philadelphia CBD$56,227 $(20,586)$35,641 $53,471 $(19,743)$33,728 
Pennsylvania Suburbs32,771 (9,779)22,992 31,807 (10,158)21,649 
Austin, Texas25,237 (11,294)13,943 24,915 (10,293)14,622 
Other9,389 (5,412)3,977 8,799 (5,438)3,361 
Corporate5,603 (3,764)1,839 8,513 (2,286)6,227 
Operating properties$129,227 $(50,835)$78,392 $127,505 $(47,918)$79,587 
Includes property operating expenses, real estate taxes and third-party management expense.
Unconsolidated real estate ventures:
Investment in real estate venturesEquity in income (loss) of real estate venture
As ofThree Months Ended March 31,
March 31, 2023December 31, 202220232022
Philadelphia CBD$404,838 $387,301 $(3,259)$(2,772)
Metropolitan Washington, D.C.82,281 83,903 (1,176)(186)
Mid-Atlantic Office JV30,591 31,005 190 418 
MAP Venture(38,284)(35,411)(1,922)(2,023)
Austin, Texas66,065 65,426 — — 
Total$545,491 $532,224 $(6,167)$(4,563)
Net operating income (“NOI”) is a non-GAAP financial measure, which we define as total revenue less property operating expenses, real estate taxes and third-party management expenses. Property operating expenses that are included in determining NOI consist of costs that are necessary and allocable to our operating properties such as utilities, property-level salaries, repairs and maintenance, property insurance and management fees. General and administrative expenses that are not reflected in NOI primarily consist of corporate-level salaries, amortization of share awards and professional fees that are incurred as part of corporate office management. NOI presented by the Company may not be comparable to NOI reported by other companies that define NOI differently. NOI is the primary measure that is used by the Company’s management to evaluate the operating performance of the Company’s real estate assets by segment. The Company believes NOI provides useful information to investors regarding the financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. While NOI is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flow from operations or net income as defined by GAAP and should not be considered as an alternative to those measures in evaluating our liquidity or operating performance. NOI does not reflect interest expenses, real estate impairment losses, depreciation and amortization costs, capital expenditures and leasing costs. The Company believes that net income (loss), as defined by GAAP, is the most appropriate earnings measure. The following is a reconciliation of consolidated net income (loss), as defined by GAAP, to consolidated NOI, (in thousands):
Three Months Ended March 31,
20232022
Net income (loss)$(5,276)$6,101 
Plus:
Interest expense22,653 15,742 
Interest expense - amortization of deferred financing costs1,027 709 
Depreciation and amortization45,600 43,782 
General and administrative expenses9,482 10,000 
Equity in loss of unconsolidated real estate ventures6,167 4,563 
Less:
Interest and investment income505 440 
Income tax provision(25)(27)
Net gain on sale of undepreciated real estate781 897 
Consolidated net operating income$78,392 $79,587