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SEGMENT INFORMATION
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
SEGMENT INFORMATION
13. SEGMENT INFORMATION
As of June 30, 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 the Company's 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 and six months ended June 30, 2023 and real estate investments as of June 30, 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:
June 30, 2023December 31, 2022
Philadelphia CBD$1,519,616 $1,517,801 
Pennsylvania Suburbs906,584 878,546 
Austin, Texas798,229 851,835 
Total Core Segments3,224,429 3,248,182 
Other372,782 369,058 
$3,597,211 $3,617,240 
Assets held for sale (a)52,664 — 
Operating Properties$3,649,875 $3,617,240 
Corporate
Right of use asset - operating leases, net$19,346 $19,664 
Construction-in-progress$245,677 $218,869 
Land held for development$71,493 $76,499 
Prepaid leasehold interests in land held for development, net$27,762 $35,576 
Net operating income:
Three Months Ended June 30,
20232022
Total revenueOperating expenses (a)Net operating incomeTotal revenueOperating expenses (a)Net operating income
Philadelphia CBD$56,671 $(20,257)$36,414 $55,426 $(20,538)$34,888 
Pennsylvania Suburbs32,102 (10,084)22,018 31,333 (10,258)21,075 
Austin, Texas23,781 (8,683)15,098 23,921 (10,438)13,483 
Other8,888 (4,850)4,038 9,405 (5,458)3,947 
Corporate4,440 (2,145)2,295 3,957 (2,957)1,000 
Operating properties$125,882 $(46,019)$79,863 $124,042 $(49,649)$74,393 
Six Months Ended June 30,
20232022
Total revenueOperating expenses (a)Net operating incomeTotal revenueOperating expenses (a)Net operating income
Philadelphia CBD$112,898 $(40,843)$72,055 $108,897 $(40,281)$68,616 
Pennsylvania Suburbs64,873 (19,863)45,010 63,140 (20,416)42,724 
Austin, Texas49,018 (19,977)29,041 48,836 (20,731)28,105 
Other18,277 (10,262)8,015 18,204 (10,896)7,308 
Corporate10,043 (5,909)4,134 12,470 (5,243)7,227 
Operating properties$255,109 $(96,854)$158,255 $251,547 $(97,567)$153,980 
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 June 30,
June 30, 2023December 31, 202220232022
Philadelphia CBD$452,365 $387,301 $(4,412)$(2,574)
Metropolitan Washington, D.C.82,603 83,903 (1,414)(381)
Mid-Atlantic Office JV28,791 31,005 223 (101)
MAP Venture(41,310)(35,411)(1,995)(1,925)
Austin, Texas66,746 65,426 — — 
Total$589,195 $532,224 $(7,598)$(4,981)
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 June 30,Six Months Ended June 30,
2023202220232022
Net income (loss)$(12,737)$4,651 $(18,013)$10,752 
Plus:
Interest expense23,669 16,341 46,322 32,083 
Interest expense - amortization of deferred financing costs1,114 805 2,141 1,514 
Depreciation and amortization47,079 43,959 92,679 87,741 
General and administrative expenses9,360 8,328 18,842 18,328 
Equity in loss of unconsolidated real estate ventures7,598 4,981 13,765 9,544 
Provision for impairment4,468 — 4,468 — 
Less:
Interest income520 449 1,025 889 
Income tax provision(13)(48)(38)(75)
Net gain on disposition of real estate— 144 — 144 
Net gain on sale of undepreciated real estate— 4,127 781 5,024 
Net gain on real estate venture transactions181 — 181 — 
Consolidated net operating income$79,863 $74,393 $158,255 $153,980