-----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, VNw86NtLnzR+6sqXfZVjaQIuio8ODGpjxgHANVraz0TcaTy7lpudiAbFnJXIkRjh 6uAr124PgT+O9Hdh3kq7Rg== 0001104659-08-049803.txt : 20080805 0001104659-08-049803.hdr.sgml : 20080805 20080805100236 ACCESSION NUMBER: 0001104659-08-049803 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20080805 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080805 DATE AS OF CHANGE: 20080805 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HRPT PROPERTIES TRUST CENTRAL INDEX KEY: 0000803649 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 046558834 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09317 FILM NUMBER: 08989940 BUSINESS ADDRESS: STREET 1: 400 CENTRE ST CITY: NEWTON STATE: MA ZIP: 02458 BUSINESS PHONE: 6177968350 MAIL ADDRESS: STREET 1: 400 CENTRE STREET CITY: NEWTON STATE: MA ZIP: 02458 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH & RETIREMENT PROPERTIES TRUST DATE OF NAME CHANGE: 19940811 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH & REHABILITATION PROPERTIES TRUST DATE OF NAME CHANGE: 19920703 8-K 1 a08-20700_18k.htm 8-K

 

 

UNITED STATES

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): August 5, 2008 (August 5, 2008)

 

HRPT PROPERTIES TRUST

(Exact Name of Registrant as Specified in Its Charter)

 

Maryland

(State or Other Jurisdiction of Incorporation)

 

1-9317

 

04-6558834

(Commission File Number)

 

(IRS Employer Identification No.)

 

400 Centre Street, Newton, Massachusetts 02458

(Address of Principal Executive Offices)         (Zip Code)

 

617-332-3990

(Registrant’s Telephone Number, Including Area Code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

 

o

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

 

o

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

 

o

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


 

Item 2.02.                      Results of Operations and Financial Condition.

 

On August 5, 2008, HRPT Properties Trust, or the Company, issued a press release setting forth the Company’s results of operations and financial condition for the quarter and six months ended June 30, 2008 and also provided certain supplemental operating and financial data for the quarter and six months ended June 30, 2008. Copies of the Company’s press release and supplemental operating and financial data are furnished as Exhibits 99.1 and 99.2 hereto, respectively.

 

Item 9.01.                      Financial Statements and Exhibits.

 

(d)                               Exhibits

 

The Company hereby furnishes the following exhibits:

 

99.1                           Press release dated August 5, 2008

99.2                           Second Quarter 2008 Supplemental Operating and Financial Data

 

2


 

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 hereunto duly authorized.

 

 

HRPT PROPERTIES TRUST

 

 

 

 

 

 

 

 

By:

 

/s/ John C. Popeo

 

Name:

John C. Popeo

 

 

Title:

Treasurer and Chief
Financial Officer

 

 

Dated:  August 5, 2008

 

3

 EX-99.1 2 a08-20700_1ex99d1.htm EX-99.1

Exhibit 99.1

 

400 Centre Street, Newton, MA 02458-2076

 

 

tel: (617) 332-3990     fax: (617) 332-2261

 

FOR IMMEDIATE RELEASE

 

 

 

Contacts:

Timothy A. Bonang, Director of Investor Relations, or

Katherine L. Johnston, Manager of Investor Relations

(617) 796-8222

www.hrpreit.com

 

HRPT Properties Trust Announces Results for the Periods

Ended June 30, 2008

 

Newton, MA (August 5, 2008): HRPT Properties Trust (NYSE: HRP) today announced financial results for the quarter and six months ended June 30, 2008.

 

Results for the quarter ended June 30, 2008:

 

Net income available for common shareholders was $55.4 million for the quarter ended June 30, 2008, compared to $16.1 million for the same quarter last year. Net income available for common shareholders per share, basic and diluted, (EPS) for the quarters ended June 30, 2008 and 2007 was $0.25 and $0.08, respectively. Net income for the quarter ended June 30, 2008 includes a $40.0 million, or $0.18 per share, gain on sale of properties.

 

Funds from operations (FFO) available for common shareholders for the quarter ended June 30, 2008 was $64.1 million, or $0.28 per share basic and diluted, compared to FFO available for common shareholders for the quarter ended June 30, 2007 of $62.6 million, or $0.30 per share basic and $0.29 per share diluted.

 

The weighted average number of basic and diluted common shares outstanding totaled 225,448,673 and 254,641,331 respectively, for the quarter ended June 30, 2008, and 211,720,711 and 240,913,369 respectively, for the quarter ended June 30, 2007.

 

Results for the six months ended June 30, 2008:

 

Net income available for common shareholders was $70.1 million for the six months ended June 30, 2008, compared to $33.8 million for the same period last year. Net income available for common shareholders per share, basic and diluted, (EPS) for the six months ended June 30, 2008 and 2007 was $0.31 and $0.16, respectively. Net income for the six months ended June 30, 2008 includes a $40.0 million, or $0.18 per share, gain on sale of properties.

 

A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the New York Stock Exchange.  No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.

 


 

Funds from operations (FFO) available for common shareholders for the six months ended June 30, 2008 was $127.2 million, or $0.56 per share basic and $0.55 per share diluted, compared to FFO available for common shareholders for the six months ended June 30, 2007 of $123.8 million, or $0.59 per share basic and $0.57 per share diluted.

 

The weighted average number of basic and diluted common shares outstanding totaled 225,446,585 and 254,639,243 respectively, for the six months ended June 30, 2008, and 211,167,789 and 240,360,447 respectively, for the six months ended June 30, 2007.

 

Occupancy and Leasing Results (excluding properties classified in discontinued operations):

 

As of June 30, 2008, 90.9% of HRP’s total square feet was leased, compared to 92.7% as of June 30, 2007.

 

HRP signed lease renewals for 1,316,000 square feet and new leases for 379,000 square feet during the quarter ended June 30, 2008, for weighted average rental rates that were 9% above prior rents for the same space. Average lease terms for leases signed during the second quarter of 2008 were 5.6 years. Commitments for tenant improvement and leasing commission (TI/LC) costs for leases signed during the quarter ended June 30, 2008 totaled $7.84 per square foot on a weighted average basis.

 

Investing Activities:

 

During the second quarter of 2008, HRP acquired one office property with 374,000 square feet of space for $53.1 million, excluding closing costs, and sold five properties with 449,000 square feet of space for $83.8 million, excluding closing costs.

 

Conference Call:

 

On Tuesday, August 5, 2008, at 1:00 p.m. Eastern Time, Adam Portnoy, Managing Trustee, and John Popeo, Chief Financial Officer, will host a conference call to discuss the second quarter 2008 results.

 

The conference call telephone number is (888) 256-0990. Participants calling from outside the United States and Canada should dial (913) 312-0840. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through 4:00 p.m. Eastern Time on Tuesday, August 12th. To hear the replay, dial (719) 457-0820. The replay pass code is 4989931.

 

2


 

A live audio webcast of the conference call will also be available in a listen only mode on HRP’s website, which is located at www.hrpreit.com. Participants wanting to access the webcast should visit the company’s web site about five minutes before the call. The archived webcast will be available for replay on HRP’s web site for about one week after the call.

 

Supplemental Data:

 

A copy of HRP’s Second Quarter 2008 Supplemental Operating and Financial Data is available for download at HRP’s web site, www.hrpreit.com, which web site is not part of this press release.

 

HRPT Properties Trust is a real estate investment trust, or REIT, which primarily owns office buildings located throughout the United States. As of June 30, 2008, HRP owned 489 operating properties with 63.4 million square feet, including approximately 17 million square feet of leased industrial and commercial lands in Oahu, HI, and 44 properties with 1.8 million square feet under contract for sale. HRP is headquartered in Newton, Massachusetts.

 

Please see the pages attached hereto for a more detailed statement of our operating results and financial condition, along with an explanation of our calculation of FFO.

 

3


 

HRPT Properties Trust

Consolidated Statements of Income and Funds from Operations

(amounts in thousands, except per share data)

 

 

 

Quarter Ended June 30,

 

Six Months Ended June 30,

 

 

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

204,273

 

$

196,231

 

$

405,445

 

$

387,197

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Operating expenses

 

83,747

 

77,800

 

164,964

 

154,534

 

Depreciation and amortization

 

45,228

 

42,684

 

90,041

 

83,211

 

General and administrative

 

8,991

 

8,633

 

17,853

 

16,724

 

Total expenses

 

137,966

 

129,117

 

272,858

 

254,469

 

Operating income

 

66,307

 

67,114

 

132,587

 

132,728

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

89

 

567

 

418

 

1,025

 

Interest expense (including amortization of debt discounts, premiums and deferred financing fees of $1,431, $1,038, $2,526 and $2,148, respectively)

 

(44,383

)

(42,190

)

(89,423

)

(82,308

)

Loss on early extinguishment of debt

 

—

 

(711

)

—

 

(711

)

Income from continuing operations before income tax expense

 

22,013

 

24,780

 

43,582

 

50,734

 

Income tax benefit (expense)

 

4

 

—

 

(160

)

—

 

Income from continuing operations

 

22,017

 

24,780

 

43,422

 

50,734

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

Income from discontinued operations

 

6,068

 

6,694

 

12,069

 

13,888

 

Gain on sale of properties

 

39,967

 

—

 

39,967

 

—

 

Net income

 

68,052

 

31,474

 

95,458

 

64,622

 

Preferred distributions

 

(12,667

)

(15,401

)

(25,334

)

(30,802

)

Net income available for common shareholders

 

$

55,385

 

$

16,073

 

$

70,124

 

$

33,820

 

 

 

 

 

 

 

 

 

 

 

Calculation of Funds from Operations, or FFO (1):

 

 

 

 

 

 

 

 

 

Net income

 

$

68,052

 

$

31,474

 

$

95,458

 

$

64,622

 

Plus: depreciation and amortization from continuing operations

 

45,228

 

42,684

 

90,041

 

83,211

 

Plus: depreciation and amortization from discontinued operations

 

3,454

 

3,102

 

7,004

 

6,086

 

Loss on early extinguishment of debt:

 

 

 

 

 

 

 

 

 

Add: amount included in expenses

 

—

 

711

 

—

 

711

 

Less: portion settled in cash

 

—

 

—

 

—

 

—

 

Less: gain on sale of properties

 

(39,967

)

—

 

(39,967

)

—

 

FFO

 

76,767

 

77,971

 

152,536

 

154,630

 

Less: preferred distributions

 

(12,667

)

(15,401

)

(25,334

)

(30,802

)

FFO available for common shareholders

 

$

64,100

 

$

62,570

 

$

127,202

 

$

123,828

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding – basic

 

225,449

 

211,721

 

225,447

 

211,168

 

Weighted average common shares outstanding – diluted (2)

 

254,642

 

240,914

 

254,640

 

240,361

 

 

 

 

 

 

 

 

 

 

 

Per common share:

 

 

 

 

 

 

 

 

 

Income from continuing operations available for common shareholders – basic and diluted

 

$

0.04

 

$

0.04

 

$

0.08

 

$

0.09

 

Income from discontinued operations – basic and diluted

 

$

0.20

 

$

0.03

 

$

0.23

 

$

0.07

 

Net income available for common shareholders – basic and diluted

 

$

0.25

 

$

0.08

 

$

0.31

 

$

0.16

 

FFO available for common shareholders – basic

 

$

0.28

 

$

0.30

 

$

0.56

 

$

0.59

 

FFO available for common shareholders – diluted

 

$

0.28

 

$

0.29

 

$

0.55

 

$

0.57

 

 

 

 

 

 

 

 

 

 

 

Common distributions paid

 

$

0.21

 

$

0.21

 

$

0.42

 

$

0.42

 

 

4


 

(1)   We compute FFO as shown in the calculations above. Our calculations of FFO differ from the National Association of Real Estate Investment Trusts, or NAREIT, definition because we add loss on early extinguishment of debt unless settled in cash. We consider FFO to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities. We believe that FFO provides useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense and gains or losses on sales of depreciated operating properties, FFO can facilitate a comparison of operating performance among REITs. FFO does not represent cash generated by operating activities in accordance with generally accepted accounting principles, or GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity. FFO is one important factor considered by our Board of Trustees in determining the amount of distributions to shareholders. Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our revolving credit facility and public debt covenants, the availability of debt and equity capital to us and our expectations of future capital requirements and operating performance.

 

(2)   As of June 30, 2008, we had 15,180 series D preferred shares that were convertible into 29,193 common shares. The effect of our series D convertible preferred shares on income from continuing operations available for common shareholders per share is anti-dilutive to income but dilutive to FFO for the quarter and six months ended June 30, 2008 and 2007. Set forth below is the calculation of diluted net income available for common shareholders, diluted FFO available for common shareholders and diluted weighted average common shares outstanding.

 

 

 

Quarter Ended June 30,

 

Six Months Ended June 30,

 

 

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

 

Net income available for common shareholders

 

$

55,385

 

$

16,073

 

$

70,124

 

$

33,820

 

Add - Series D convertible preferred distributions

 

6,167

 

6,167

 

12,334

 

12,334

 

Net income available for common shareholders – diluted

 

$

61,552

 

$

22,240

 

$

82,458

 

$

46,154

 

 

 

 

 

 

 

 

 

 

 

FFO available for common shareholders

 

$

64,100

 

$

62,570

 

$

127,202

 

$

123,828

 

Add - Series D convertible preferred distributions

 

6,167

 

6,167

 

12,334

 

12,334

 

FFO available for common shareholders – diluted

 

$

70,267

 

$

68,737

 

$

139,536

 

$

136,162

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding – basic

 

225,449

 

211,721

 

225,447

 

211,168

 

Effect of dilutive Series D preferred shares

 

29,193

 

29,193

 

29,193

 

29,193

 

Weighted average common shares outstanding – diluted

 

254,642

 

240,914

 

254,640

 

240,361

 

 

5


 

HRPT Properties Trust

Consolidated Balance Sheets

(amounts in thousands, except share data)

 

 

 

June 30,

 

December 31,

 

 

 

2008

 

2007

 

 

 

 

 

(audited)

 

ASSETS

 

 

 

 

 

Real estate properties:

 

 

 

 

 

Land

 

$

1,166,638

 

$

1,189,684

 

Buildings and improvements

 

4,770,280

 

4,966,610

 

 

 

5,936,918

 

6,156,294

 

Accumulated depreciation

 

(799,958

)

(808,216

)

 

 

5,136,960

 

5,348,078

 

Properties held for sale

 

311,665

 

—

 

Acquired real estate leases

 

151,869

 

150,672

 

Cash and cash equivalents

 

33,277

 

19,879

 

Restricted cash

 

94,105

 

18,027

 

Rents receivable, net of allowance for doubtful accounts of $8,082 and $6,290, respectively

 

174,677

 

197,967

 

Other assets, net

 

100,593

 

124,709

 

Total assets

 

$

6,003,146

 

$

5,859,332

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Revolving credit facility

 

$

301,000

 

$

140,000

 

Senior unsecured debt, net

 

2,240,504

 

2,239,784

 

Mortgage notes payable, net

 

380,116

 

394,376

 

Mortgage notes payable and other liabilities related to properties held for sale

 

16,271

 

—

 

Accounts payable and accrued expenses

 

96,358

 

89,441

 

Acquired real estate lease obligations

 

42,375

 

41,607

 

Rent collected in advance

 

22,628

 

24,779

 

Security deposits

 

12,597

 

16,063

 

Due to affiliates

 

12,819

 

10,399

 

Total liabilities

 

3,124,668

 

2,956,449

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Preferred shares of beneficial interest, $0.01 par value:

 

 

 

 

 

50,000,000 shares authorized;

 

 

 

 

 

Series B preferred shares; 8 3/4% cumulative redeemable at par on or after September 12, 2007; 7,000,000 shares issued and outstanding, aggregate liquidation preference $175,000

 

169,079

 

169,079

 

Series C preferred shares; 7 1/8% cumulative redeemable at par on or after February 15, 2011; 6,000,000 shares issued and outstanding, aggregate liquidation preference $150,000

 

145,015

 

145,015

 

Series D preferred shares; 6 1/2% cumulative convertible; 15,180,000 shares issued and outstanding, aggregate liquidation preference $379,500

 

368,270

 

368,270

 

Common shares of beneficial interest, $0.01 par value:

 

 

 

 

 

350,000,000 shares authorized; 225,464,497 and 225,444,497 shares issued and outstanding, respectively

 

2,255

 

2,254

 

Additional paid in capital

 

2,923,611

 

2,923,455

 

Cumulative net income

 

1,923,067

 

1,827,609

 

Cumulative common distributions

 

(2,346,225

)

(2,251,539

)

Cumulative preferred distributions

 

(306,594

)

(281,260

)

Total shareholders’ equity

 

2,878,478

 

2,902,883

 

Total liabilities and shareholders’ equity

 

$

6,003,146

 

$

5,859,332

 

 

6

 EX-99.2 3 a08-20700_1ex99d2.htm EX-99.2

Exhibit 99.2

 

 

 

HRPT PROPERTIES TRUST

 

Second Quarter 2008

 

Supplemental Operating and Financial Data

 

All amounts in this report are unaudited, except for the December 31, 2007 Consolidated Balance Sheet.

 


 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

 

 

 

CORPORATE INFORMATION

 

 

 

 

 

Company Profile

5

 

Investor Information

6

 

Research Coverage

7

 

 

 

FINANCIAL INFORMATION

 

 

 

 

 

Key Financial Data

9

 

Consolidated Balance Sheets

10

 

Consolidated Statements of Income

11

 

Consolidated Statements of Cash Flows

12

 

Calculation of EBITDA

13

 

Calculation and Reconciliation of Property Net Operating Income (NOI)

14

 

Calculation of Funds from Operations (FFO)

15

 

Calculation of Diluted Net Income, FFO and Weighted Average Common Shares Outstanding

16

 

Summary Results of Operations by Property Type

17

 

Summary Results of Operations by Major Market

18

 

Same Property Results and Analysis by Property Type

19

 

Same Property Results and Analysis by Major Market

20

 

Debt Summary

21

 

Debt Maturity Schedule

22

 

Leverage Ratios, Coverage Ratios and Public Debt Covenants

23

 

Tenant Improvements, Leasing Costs and Capital Improvements

24

 

2008 Acquisitions and Dispositions Information

25

 

2008 Financing Activities

26

 

 

 

PORTFOLIO AND LEASING INFORMATION

 

 

 

 

 

Portfolio Summary by Property Type, Tenant and Major Market (Square Feet)

28

 

Portfolio Summary by Property Type, Tenant and Major Market (Annualized Rental Income)

29

 

Summary of Properties by Major Market

30

 

Leasing Summary

31

 

Occupancy and Leasing Analysis by Property Type and Major Market (3 Months Ended 6/30/2008)

32

 

Occupancy and Leasing Analysis by Property Type and Major Market (6 Months Ended 6/30/2008)

33

 

Tenants Representing 1% or More of Total Rent

34

 

Three Year Lease Expiration Schedule by Property Type

35

 

Three Year Lease Expiration Schedule by Major Market

36

 

Portfolio Lease Expiration Schedule

37

 

2


 

WARNING REGARDING

FORWARD LOOKING STATEMENTS

 

THIS SUPPLEMENTAL OPERATING AND FINANCIAL DATA REPORT CONTAINS STATEMENTS WHICH CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS.  WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE” OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS.  THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR.  ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS.

 

IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN OUR FORWARD LOOKING STATEMENTS ARE:

 

·                  CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS,

 

·                  COMPETITION WITHIN THE REAL ESTATE INDUSTRY OR THOSE INDUSTRIES IN WHICH OUR TENANTS OPERATE,

 

·                  CHANGES IN FEDERAL, STATE AND LOCAL LEGISLATION, AND

 

·                  IF THE AVAILABILITY OF DEBT CAPITAL REMAINS RESTRICTED OR BECOMES MORE RESTRICTED, WE MAY BE UNABLE TO REFINANCE OR REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE OR ON TERMS WHICH ARE AS FAVORABLE AS WE NOW HAVE.

 

FOR EXAMPLE:

 

·                  SOME OF OUR TENANTS MAY NOT RENEW EXPIRING LEASES, AND WE MAY BE UNABLE TO LOCATE NEW TENANTS TO MAINTAIN THE HISTORICAL OCCUPANCY RATES OF OUR PROPERTIES,

 

·                  RENTS THAT WE CAN CHARGE AT OUR PROPERTIES MAY DECLINE,

 

·                  OUR TENANTS MAY EXPERIENCE LOSSES AND BECOME UNABLE TO PAY OUR RENTS,

 

·                  CONTINGENCIES IN OUR COMMITTED ACQUISITIONS AND SALES MAY CAUSE THESE TRANSACTIONS NOT TO OCCUR OR TO BE DELAYED,

 

·                  WE MAY BE UNABLE TO IDENTIFY PROPERTIES WHICH WE WANT TO BUY OR TO NEGOTIATE ACCEPTABLE PURCHASE PRICES,

 

·                  WE MAY BE UNABLE TO MAINTAIN OUR CURRENT RATE OF DISTRIBUTIONS AND FUTURE DISTRIBUTIONS MAY BE SUSPENDED OR PAID AT A LESSER RATE THAN THE DISTRIBUTIONS WE NOW PAY, AND

 

OTHER RISKS MAY ADVERSELY IMPACT US, AS DESCRIBED MORE FULLY IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2007, UNDER “ITEM 1A. RISK FACTORS.”

 

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON ANY FORWARD LOOKING STATEMENTS.

 

EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

 


 

CORPORATE INFORMATION

 


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

COMPANY PROFILE

 

The Company:

 

HRPT Properties Trust, or HRP, is a real estate investment trust, or REIT, which primarily owns office buildings located throughout the United States.  The majority of our properties are commercial office buildings located in suburban areas and central business districts, or CBDs, of major metropolitan markets.  As of June 30, 2008, we also owned approximately 17 million square feet of leased industrial and commercial lands in Oahu, Hawaii.  We have large concentrations of properties leased to tenants with good credit characteristics, such as the U.S. Government.  We have been investment grade rated since 1994 and we are included in a number of financial indices, including the Russell 1000®, the MSCI US REIT Index, the S&P REIT Composite Index and the FTSE NAREIT Composite Index.

 

Strategy:

 

Our primary business strategy is to efficiently operate our properties to maintain high occupancies, at market rents, with strong credit quality tenants.  We attempt to maintain an investment portfolio that is balanced between “security” and “growth”.  The security part of our portfolio includes properties that are long term leased or leased to tenants we believe are likely to renew their occupancy, such as government agencies and our leased lands in Hawaii.  The growth part of our portfolio includes our multi-tenant commercial office buildings, which we believe may generate higher rents and appreciate in value in the future because of their physical qualities and locations.  Although we sometimes sell properties, we consider ourselves to be a long term investor and are more interested in the long term earnings potential of our properties than selling properties for short term gains.  We currently do not have any investments in joint venture or off balance sheet entities.

 

Management:

 

HRP is managed by Reit Management & Research LLC, or RMR.  RMR was founded in 1986 to manage public investments in real estate.  As of June 30, 2008, RMR managed one of the largest portfolios of publicly owned real estate in North America, including nearly 1,300 properties, located in 45 states, the District of Columbia, Puerto Rico and Ontario, Canada.  RMR has approximately 550 employees in its headquarters and regional offices located throughout the Country.  In addition to managing HRP, RMR and its affiliates also manage Hospitality Properties Trust, a publicly traded REIT that owns hotels and travel centers, and Senior Housing Properties Trust, a publicly traded REIT that primarily owns healthcare properties.  An affiliate of RMR, RMR Advisors, is the investment manager of several publicly traded mutual funds, the RMR Funds, which principally invest in securities of unaffiliated real estate companies.  The public companies managed by RMR and its affiliates had combined total market capitalization of about $14 billion as of June 30, 2008.  We believe that being managed by RMR is a competitive advantage for HRP because RMR provides HRP with a depth and quality of management and experience which may be unequaled in the real estate industry.  We also believe RMR provides management services to HRP at costs that are lower than HRP would have to pay for similar quality services.

 

Corporate Headquarters:

 

400 Centre Street

Newton, MA  02458

(t)  (617) 332-3990

(f)  (617) 332-2261

 

Stock Exchange Listing:

 

New York Stock Exchange

 

Trading Symbols:

 

Common Stock — HRP

Preferred Stock Series B — HRP-B

Preferred Stock Series C — HRP-C

Preferred Stock Series D — HRP-D

 

Senior Unsecured Debt Ratings:

 

Moody’s — Baa2

Standard & Poor’s — BBB

 

Portfolio Data (as of 6/30/08) (1):

 

Total properties

 

489

 

Total sq. ft. (000s)

 

63,438

 

Percent leased

 

90.9

%

 

Portfolio Concentration by Sq. Ft. (as of 6/30/08) (1):

 

 

 

 

 

Industrial

 

 

 

 

 

Office

 

and Other

 

Total

 

CBD

 

18.9

%

0.2

%

19.1

%

Suburban

 

35.2

%

45.7

%

80.9

%

Total

 

54.1

%

45.9

%

100.0

%

 

Portfolio Concentration by NOI (Q2 2008) (1) (2):

 

 

 

 

 

Industrial

 

 

 

 

 

Office

 

and Other

 

Total

 

CBD

 

31.7

%

0.2

%

31.9

%

Suburban

 

46.2

%

21.9

%

68.1

%

Total

 

77.9

%

22.1

%

100.0

%

 

Portfolio Concentration by Major Market (1):

 

 

 

6/30/08

 

Q2 2008

 

 

 

Sq. Ft.

 

NOI

 

Metro Philadelphia, PA

 

8.3

%

12.3

%

Oahu, HI

 

28.2

%

10.6

%

Metro Washington, DC

 

3.8

%

9.4

%

Metro Boston, MA

 

4.1

%

5.8

%

Southern California

 

1.9

%

5.4

%

Metro Austin, TX

 

4.1

%

4.1

%

Other Markets

 

49.6

%

52.4

%

Total

 

100.0

%

100.0

%

 

(1)          Excludes properties classified in discontinued operations.

(2)          We compute NOI, or property net operating income, as rental income from real estate less property operating expenses; NOI excludes income from other investments; see page 14 for the calculation of NOI and a reconciliation of NOI to Net Income.

 

5


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

INVESTOR INFORMATION

 

Board of Trustees

 

Barry M. Portnoy

Adam D. Portnoy

Managing Trustee

Managing Trustee

 

 

Patrick F. Donelan

Frederick N. Zeytoonjian

Independent Trustee

Independent Trustee

 

 

William A. Lamkin

 

Independent Trustee

 

 

Senior Management

 

John A. Mannix

David M. Lepore

President and Chief Operating Officer

Senior Vice President

 

 

John C. Popeo

Jennifer B. Clark

Treasurer, Chief Financial Officer and Secretary

Senior Vice President

 

Contact Information

 

Investor Relations

Inquiries

HRPT Properties Trust

Financial inquiries should be directed to John C. Popeo,

400 Centre Street

Treasurer and Chief Financial Officer, at (617) 332-3990

Newton, MA 02458

or jpopeo@hrpreit.com.

(t) (617) 332-3990

 

(f) (617) 332-2261

Investor and media inquiries should be directed to

(e-mail) info@hrpreit.com

Timothy A. Bonang, Director of Investor Relations, at

(website) www.hrpreit.com

(617) 796-8222 or tbonang@hrpreit.com, or

 

Katherine L. Johnston, Manager of Investor Relations, at

 

(617) 796-8222 or kjohnston@hrpreit.com.

 

6


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

RESEARCH COVERAGE

 

Equity Research Coverage

 

Cantor Fitzgerald

Raymond James

Philip Martin

Paul Puryear

(312) 469-7485

(727) 573-3800

 

 

Citigroup

Stifel, Nicolaus

Michael Bilerman

John Guinee

(212) 816-1383

(443) 224-1307

 

 

Merrill Lynch

UBS

Ian Weissman

James Feldman

(212) 449-6255

(212) 713-4932

 

 

RBC Capital Markets

 

David Rodgers

 

(216) 378-7626

 

 

Debt Research Coverage

 

Citigroup

Wachovia

Thomas Cook

Thierry Perrin

(212) 723-1112

(704) 715-8455

 

 

Merrill Lynch

 

John Forrey

 

(212) 449-1812

 

 

Rating Agencies

 

Moody’s Investors Service

Standard and Poor’s

Lori Marks

Linda Phelps

(212) 553-1098

(212) 438-3059

 

 

 

HRPT is followed by the analysts and its publicly held debt and preferred shares are rated by the rating agencies listed above.  Please note that any opinions, estimates or forecasts regarding HRPT’s performance made by these analysts or agencies do not represent opinions, forecasts or predictions of HRPT or its management.  HRPT does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts or agencies.

 

7


 

FINANCIAL INFORMATION

 


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

KEY FINANCIAL DATA

(amounts in thousands, except per share data)

 

 

 

As of and For the Three Months Ended

 

 

 

6/30/2008

 

3/31/2008

 

12/31/2007

 

9/30/2007

 

6/30/2007

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding (at end of period)

 

225,464

 

225,444

 

225,444

 

212,457

 

211,947

 

Common shares outstanding (at end of period) — diluted (1)

 

254,657

 

254,637

 

254,637

 

241,650

 

241,139

 

Preferred shares outstanding (at end of period) (1)

 

28,180

 

28,180

 

28,180

 

33,180

 

33,180

 

Weighted average common shares and units outstanding - basic

 

225,449

 

225,444

 

222,927

 

212,078

 

211,721

 

Weighted average common shares and units outstanding - diluted (1)

 

254,642

 

254,637

 

252,120

 

241,271

 

240,914

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

Price at end of period

 

$

6.77

 

$

6.73

 

$

7.73

 

$

9.89

 

$

10.40

 

High during period

 

$

8.00

 

$

8.56

 

$

10.49

 

$

10.90

 

$

12.72

 

Low during period

 

$

6.75

 

$

6.58

 

$

7.40

 

$

9.06

 

$

10.13

 

Annualized dividends paid per share

 

$

0.84

 

$

0.84

 

$

0.84

 

$

0.84

 

$

0.84

 

Annualized dividend yield (at end of period)

 

12.4

%

12.5

%

10.9

%

8.5

%

8.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Selected Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

6,003,146

 

$

5,959,846

 

$

5,859,332

 

$

5,800,512

 

$

5,750,889

 

Total liabilities

 

$

3,124,668

 

$

3,089,567

 

$

2,956,449

 

$

2,861,976

 

$

2,789,191

 

Gross book value of real estate assets (2)

 

$

6,517,894

 

$

6,501,910

 

$

6,367,166

 

$

6,261,302

 

$

6,198,307

 

Total debt / gross book value of real estate (2)

 

45.0

%

44.8

%

43.6

%

42.7

%

42.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Book Capitalization:

 

 

 

 

 

 

 

 

 

 

 

Total debt

 

$

2,932,959

 

$

2,911,699

 

$

2,774,160

 

$

2,674,859

 

$

2,614,133

 

Plus: total stockholders’ equity

 

2,878,478

 

2,870,279

 

2,902,883

 

2,938,536

 

2,961,698

 

Total book capitalization

 

$

5,811,437

 

$

5,781,978

 

$

5,677,043

 

$

5,613,395

 

$

5,575,831

 

Total debt / total book capitalization

 

50.5

%

50.4

%

48.9

%

47.7

%

46.9

%

 

 

 

 

 

 

 

 

 

 

 

 

Market Capitalization:

 

 

 

 

 

 

 

 

 

 

 

Total debt (book value)

 

$

2,932,959

 

$

2,911,699

 

$

2,774,160

 

$

2,674,859

 

$

2,614,133

 

Plus: market value of preferred shares (at end of period)

 

556,585

 

557,678

 

586,010

 

800,245

 

817,108

 

Plus: market value of common shares (at end of period)

 

1,526,391

 

1,517,238

 

1,742,682

 

2,101,200

 

2,204,249

 

Total market capitalization

 

$

5,015,935

 

$

4,986,615

 

$

5,102,852

 

$

5,576,304

 

$

5,635,490

 

Total debt / total market capitalization

 

58.5

%

58.4

%

54.4

%

48.0

%

46.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Selected Income Statement Data (3):

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

204,273

 

$

215,164

 

$

214,006

 

$

211,217

 

$

209,995

 

EBITDA (4)

 

$

121,328

 

$

121,157

 

$

120,608

 

$

119,917

 

$

120,272

 

Property net operating income (NOI) (5)

 

$

120,526

 

$

130,201

 

$

128,785

 

$

128,449

 

$

128,829

 

NOI margin (6)

 

59.0

%

60.5

%

60.2

%

60.8

%

61.3

%

Net income

 

$

68,052

 

$

27,406

 

$

27,479

 

$

32,154

 

$

31,474

 

Preferred distributions

 

$

(12,667

)

$

(12,667

)

$

(14,368

)

$

(15,402

)

$

(15,401

)

Excess redemption price paid over carrying value of preferred shares

 

$

—

 

$

—

 

$

(4,230

)

$

—

 

$

—

 

Net income available for common shareholders

 

$

55,385

 

$

14,739

 

$

8,881

 

$

16,752

 

$

16,073

 

Funds from operations (FFO) (7)

 

$

76,767

 

$

75,769

 

$

75,269

 

$

78,270

 

$

77,971

 

FFO available for common shareholders (7)

 

$

64,100

 

$

63,102

 

$

60,901

 

$

62,868

 

$

62,570

 

Common distributions paid

 

$

47,343

 

$

47,343

 

$

47,341

 

$

44,509

 

$

44,390

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data (1):

 

 

 

 

 

 

 

 

 

 

 

Net income available for common shareholders — basic and diluted

 

$

0.25

 

$

0.07

 

$

0.04

 

$

0.08

 

$

0.08

 

FFO available for common shareholders — basic (7)

 

$

0.28

 

$

0.28

 

$

0.27

 

$

0.30

 

$

0.30

 

FFO available for common shareholders — diluted (1) (7)

 

$

0.28

 

$

0.27

 

$

0.27

 

$

0.29

 

$

0.29

 

Common distributions paid

 

$

0.21

 

$

0.21

 

$

0.21

 

$

0.21

 

$

0.21

 

FFO payout ratio

 

73.9

%

75.0

%

77.7

%

70.8

%

70.9

%

 

 

 

 

 

 

 

 

 

 

 

 

Coverage Ratios:

 

 

 

 

 

 

 

 

 

 

 

EBITDA (4) / interest expense

 

2.7x

 

2.7x

 

2.7x

 

2.7x

 

2.8x

 

EBITDA (4) / interest expense and preferred distributions

 

2.1x

 

2.1x

 

2.0x

 

2.0x

 

2.1x

 

 

(1)          As of 6/30/2008, we had 15,180 preferred shares outstanding that were convertible into 29,193 common shares.  See page 16 for calculations of diluted net income, FFO and weighted average common shares outstanding.

(2)          Gross book value of real estate assets is real estate properties, at cost, including purchase price allocations less impairment writedowns, if any.

(3)          Prior periods reflect amounts previously reported and excludes retroactive adjustments for properties classified in discontinued operations in the current period.

(4)          See page 13 for calculation of EBITDA.

(5)          Property net operating income, or NOI, is defined as rental income from real estate less property operating expenses; see page 14 for calculation of NOI and reconciliation of NOI to Net Income.

(6)          NOI margin is defined as property net operating income, or NOI, as a percentage of rental income.

(7)          See page 15 for calculation of FFO and FFO available for common shareholders.

 

9


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)

 

 

 

As of
June 30,

 

As of
December 31,

 

 

 

2008

 

2007

 

 

 

 

 

(audited)

 

ASSETS

 

 

 

 

 

Real estate properties:

 

 

 

 

 

Land

 

$

1,166,638

 

$

1,189,684

 

Buildings and improvements

 

4,770,280

 

4,966,610

 

 

 

5,936,918

 

6,156,294

 

Accumulated depreciation

 

(799,958

)

(808,216

)

 

 

5,136,960

 

5,348,078

 

Properties held for sale

 

311,665

 

—

 

Acquired real estate leases

 

151,869

 

150,672

 

Cash and cash equivalents

 

33,277

 

19,879

 

Restricted cash

 

94,105

 

18,027

 

Rents receivable, net of allowance for doubtful accounts of $8,082 and $6,290, respectively

 

174,677

 

197,967

 

Other assets, net

 

100,593

 

124,709

 

Total assets

 

$

6,003,146

 

$

5,859,332

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Revolving credit facility

 

$

301,000

 

$

140,000

 

Senior unsecured debt, net

 

2,240,504

 

2,239,784

 

Mortgage notes payable, net

 

380,116

 

394,376

 

Mortgage notes payable and other liabilities related to properties held for sale

 

16,271

 

—

 

Accounts payable and accrued expenses

 

96,358

 

89,441

 

Acquired real estate lease obligations

 

42,375

 

41,607

 

Rent collected in advance

 

22,628

 

24,779

 

Security deposits

 

12,597

 

16,063

 

Due to affiliates

 

12,819

 

10,399

 

Total liabilities

 

3,124,668

 

2,956,449

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Preferred shares of beneficial interest, $0.01 par value:

 

 

 

 

 

50,000,000 shares authorized;

 

 

 

 

 

Series B preferred shares; 8 3/4% cumulative redeemable at par on or after September 12, 2007; 7,000,000 shares issued and and outstanding, aggregate liquidation preference $175,000

 

169,079

 

169,079

 

Series C preferred shares; 7 1/8% cumulative redeemable at par on or after February 15, 2011; 6,000,000 shares issued and outstanding, aggregate liquidation preference $150,000

 

145,015

 

145,015

 

Series D preferred shares; 6 1/2% cumulative convertible; 15,180,000 shares issued and outstanding, aggregate liquidation preference $379,500

 

368,270

 

368,270

 

Common shares of beneficial interest, $0.01 par value:

 

 

 

 

 

350,000,000 shares authorized; 225,464,497 and 225,444,497 shares issued and outstanding, respectively

 

2,255

 

2,254

 

Additional paid in capital

 

2,923,611

 

2,923,455

 

Cumulative net income

 

1,923,067

 

1,827,609

 

Cumulative common distributions

 

(2,346,225

)

(2,251,539

)

Cumulative preferred distributions

 

(306,594

)

(281,260

)

Total shareholders’ equity

 

2,878,478

 

2,902,883

 

Total liabilities and shareholders’ equity

 

$

6,003,146

 

$

5,859,332

 

 

10


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

CONSOLIDATED STATEMENTS OF INCOME

(amounts in thousands, except per share data)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

6/30/2008

 

6/30/2007

 

6/30/2008

 

6/30/2007

 

 

 

 

 

 

 

 

 

 

 

Rental income (1)

 

$

204,273

 

$

196,231

 

$

405,445

 

$

387,197

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Operating expenses

 

83,747

 

77,800

 

164,964

 

154,534

 

Depreciation and amortization

 

45,228

 

42,684

 

90,041

 

83,211

 

General and administrative

 

8,991

 

8,633

 

17,853

 

16,724

 

Total expenses

 

137,966

 

129,117

 

272,858

 

254,469

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

66,307

 

67,114

 

132,587

 

132,728

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

89

 

567

 

418

 

1,025

 

Interest expense (including amortization of debt discounts, premiums and deferred financing fees of $1,431, $1,038, $2,526 and $2,148, respectively)

 

(44,383

)

(42,190

)

(89,423

)

(82,308

)

Loss on early extinguishment of debt

 

—

 

(711

)

—

 

(711

)

Income from continuing operations before income tax expense

 

22,013

 

24,780

 

43,582

 

50,734

 

Income tax benefit (expense)

 

4

 

—

 

(160

)

—

 

Income from continuing operations

 

22,017

 

24,780

 

43,422

 

50,734

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

Income from discontinued operations (1)

 

6,068

 

6,694

 

12,069

 

13,888

 

Gain on sale of properties

 

39,967

 

—

 

39,967

 

—

 

Net income

 

68,052

 

31,474

 

95,458

 

64,622

 

Preferred distributions

 

(12,667

)

(15,401

)

(25,334

)

(30,802

)

Net income available for common shareholders

 

$

55,385

 

$

16,073

 

$

70,124

 

$

33,820

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — basic

 

225,449

 

211,721

 

225,447

 

211,168

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — diluted (2)

 

254,642

 

240,914

 

254,640

 

240,361

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

Income from continuing operations available for common shareholders – basic and diluted (2)

 

$

0.04

 

$

0.04

 

$

0.08

 

$

0.09

 

Income from discontinued operations — basic and diluted (2)

 

$

0.20

 

$

0.03

 

$

0.23

 

$

0.07

 

Net income available for common shareholders — basic and diluted (2)

 

$

0.25

 

$

0.08

 

$

0.31

 

$

0.16

 

 

 

 

 

 

 

 

 

 

 

Additional Data:

 

 

 

 

 

 

 

 

 

General and administrative expenses / rental income

 

4.40

%

4.40

%

4.40

%

4.32

%

General and administrative expenses / total assets (at end of period)

 

0.15

%

0.15

%

0.30

%

0.29

%

 

 

 

 

 

 

 

 

 

 

Continuing Operations:

 

 

 

 

 

 

 

 

 

Non cash straight line rent adjustments (FAS 13) (1)

 

$

3,264

 

$

3,273

 

$

4,910

 

$

7,082

 

Lease value amortization (FAS 141) (1)

 

$

(2,353

)

$

(2,766

)

$

(4,736

)

$

(5,096

)

Lease termination fees included in rental income

 

$

1,168

 

$

31

 

$

2,175

 

$

356

 

Capitalized interest expense

 

$

—

 

$

263

 

$

—

 

$

489

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations:

 

 

 

 

 

 

 

 

 

Non cash straight line rent adjustments (FAS 13) (1)

 

$

240

 

$

641

 

$

581

 

$

1,556

 

Lease value amortization (FAS 141) (1)

 

$

(128

)

$

(114

)

$

(257

)

$

(231

)

 

(1)          We report rental income on a straight line basis over the terms of the respective leases; rental income includes non-cash straight line rent adjustments. Rental income also includes non-cash amortization of intangible lease assets and liabilities.

(2)          As of 6/30/2008, we had 15,180 series D preferred shares outstanding that were convertible into 29,193 common shares.  See page 16 for calculations of diluted net income and weighted average common shares outstanding.

 

11


 

 HRPT Properties Trust

 Supplemental Operating and Financial Data

 June 30, 2008

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

6/30/2008

 

6/30/2007

 

6/30/2008

 

6/30/2007

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

68,052

 

$

31,474

 

$

95,458

 

$

64,622

 

Adjustments to reconcile net income to cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation

 

39,500

 

36,446

 

78,906

 

71,451

 

Amortization of debt discounts, premiums and deferred financing fees

 

1,420

 

1,025

 

2,505

 

2,122

 

Amortization of acquired real estate leases

 

7,535

 

8,320

 

15,008

 

16,044

 

Other amortization

 

4,126

 

3,900

 

8,123

 

7,129

 

Loss on early extinguishment of debt

 

—

 

711

 

—

 

711

 

Gain on sale of properties

 

(39,967

)

—

 

(39,967

)

—

 

Change in assets and liabilities:

 

 

 

 

 

 

 

 

 

(Increase) decrease in restricted cash

 

(962

)

(2,336

)

5,522

 

5,064

 

Decrease (increase) in rents receivable and other assets

 

8,117

 

2,469

 

(11,805

)

(22,462

)

Increase (decrease) in accounts payable and accrued expenses

 

14,940

 

12,915

 

8,723

 

(10,705

)

(Decrease) increase in rent collected in advance

 

(929

)

(196

)

(201

)

3,144

 

Increase in security deposits

 

320

 

206

 

981

 

104

 

Increase (decrease) in due to affiliates

 

1,490

 

745

 

2,420

 

(4,515

)

Cash provided by operating activities

 

103,642

 

95,679

 

165,673

 

132,709

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Real estate acquisitions and improvements

 

(32,487

)

(153,501

)

(159,655

)

(238,235

)

Proceeds from sale of properties

 

81,813

 

—

 

81,813

 

—

 

Increase in restricted cash

 

(81,813

)

—

 

(81,813

)

—

 

Cash used for investing activities

 

(32,487

)

(153,501

)

(159,655

)

(238,235

)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common shares, net

 

—

 

10,663

 

—

 

23,661

 

Proceeds from borrowings

 

52,000

 

584,475

 

240,000

 

704,475

 

Payments on borrowings

 

(61,930

)

(469,888

)

(112,594

)

(488,051

)

Deferred financing fees

 

(3

)

(1,670

)

(6

)

(1,677

)

Distributions to common shareholders

 

(47,343

)

(44,390

)

(94,686

)

(88,501

)

Distributions to preferred shareholders

 

(12,667

)

(15,401

)

(25,334

)

(33,138

)

Cash (used for) provided by financing activities

 

(69,943

)

63,789

 

7,380

 

116,769

 

 

 

 

 

 

 

 

 

 

 

Increase in cash and cash equivalents

 

1,212

 

5,967

 

13,398

 

11,243

 

Cash and cash equivalents at beginning of period

 

32,065

 

23,059

 

19,879

 

17,783

 

Cash and cash equivalents at end of period

 

$

33,277

 

$

29,026

 

$

33,277

 

$

29,026

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

Interest paid (including capitalized interest paid of $0, $263, $0 and $489, respectively)

 

$

33,655

 

$

32,503

 

$

84,628

 

$

80,508

 

 

 

 

 

 

 

 

 

 

 

Non-cash investing activities:

 

 

 

 

 

 

 

 

 

Real estate acquisitions

 

$

(30,639

)

$

—

 

$

(30,639

)

$

—

 

 

 

 

 

 

 

 

 

 

 

Non-cash financing activities:

 

 

 

 

 

 

 

 

 

Issuance of common shares

 

$

157

 

$

175

 

$

157

 

$

175

 

Assumption of mortgage notes payable

 

30,639

 

—

 

30,639

 

—

 

 

12


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

CALCULATION OF EBITDA

(amounts in thousands)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

6/30/2008

 

6/30/2007

 

6/30/2008

 

6/30/2007

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

68,052

 

$

31,474

 

$

95,458

 

$

64,622

 

Plus:

interest expense from continuing operations

 

44,383

 

42,190

 

89,423

 

82,308

 

Plus:

interest expense from discontinued operations

 

182

 

111

 

366

 

264

 

Plus:

income tax expense

 

(4

)

—

 

160

 

—

 

Plus:

depreciation and amortization from continuing operations

 

45,228

 

42,684

 

90,041

 

83,211

 

Plus:

depreciation and amortization from discontinued operations

 

3,454

 

3,102

 

7,004

 

6,086

 

Plus:

loss on early extinguishment of debt

 

—

 

711

 

—

 

711

 

Less:

gain on sale of properties

 

(39,967

)

—

 

(39,967

)

—

 

EBITDA

 

$

121,328

 

$

120,272

 

$

242,485

 

$

237,202

 

 

We compute EBITDA, or earnings before interest, taxes, depreciation and amortization, as net income less gains on sales of properties, plus loss on early extinguishment of debt, interest expense, income tax expense and depreciation and amortization.  We consider EBITDA to be an appropriate measure of our performance, along with net income and cash flow from operating, investing and financing activities.  We believe EBITDA provides useful information to investors because by excluding the effects of certain historical costs, such as interest, depreciation and amortization expense, EBITDA can facilitate a comparison of our current operating performance with our past operating performance and of operating performances among REITs.  EBITDA does not represent cash generated by operating activities in accordance with generally accepted accounting principles, or GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity. Also, some REITs may calculate EBITDA differently than us.

 

13


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

CALCULATION AND RECONCILIATION OF PROPERTY NET OPERATING INCOME (NOI)

(amounts in thousands)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

6/30/2008

 

6/30/2007

 

6/30/2008

 

6/30/2007

 

 

 

 

 

 

 

 

 

 

 

Calculation of NOI (1):

 

 

 

 

 

 

 

 

 

Rental income

 

$

204,273

 

$

196,231

 

$

405,445

 

$

387,197

 

Operating expenses

 

(83,747

)

(77,800

)

(164,964

)

(154,534

)

Property net operating income (NOI)

 

$

120,526

 

$

118,431

 

$

240,481

 

$

232,663

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of NOI to Net Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property net operating income

 

$

120,526

 

$

118,431

 

$

240,481

 

$

232,663

 

Depreciation and amortization

 

(45,228

)

(42,684

)

(90,041

)

(83,211

)

General and administrative

 

(8,991

)

(8,633

)

(17,853

)

(16,724

)

Operating income

 

66,307

 

67,114

 

132,587

 

132,728

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

89

 

567

 

418

 

1,025

 

Interest expense

 

(44,383

)

(42,190

)

(89,423

)

(82,308

)

Loss on early extinguishment of debt

 

—

 

(711

)

—

 

(711

)

Income from continuing operations before income tax expense

 

22,013

 

24,780

 

43,582

 

50,734

 

Income tax benefit (expense)

 

4

 

—

 

(160

)

—

 

Income from continuing operations

 

22,017

 

24,780

 

43,422

 

50,734

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations

 

6,068

 

6,694

 

12,069

 

13,888

 

Gain on sale of properties

 

39,967

 

—

 

39,967

 

—

 

Net income

 

$

68,052

 

$

31,474

 

$

95,458

 

$

64,622

 

 

 

 

 

 

 

 

 

 

 

 

(1)          Excludes properties classified in discontinued operations.

 

We compute NOI as shown above.  We consider NOI to be an appropriate supplemental measure to net income because it helps both investors and management to understand the operations of our properties.  We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our results of operations because it reflects only those income and expense items that are incurred at the property level.  Our management also uses NOI to evaluate individual, regional and company wide property level performance.  NOI excludes certain components from net income available for common shareholders in order to provide results that are more closely related to our properties’ results of operations.  NOI does not represent cash generated by operating activities in accordance with GAAP, and should not be considered an alternative to net income, net income available for common shareholders or cash flow from operating activities as a measure of financial performance.

 

14


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

CALCULATION OF FUNDS FROM OPERATIONS (FFO)

(amounts in thousands, except per share data)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

6/30/2008

 

6/30/2007

 

6/30/2008

 

6/30/2007

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

68,052

 

$

31,474

 

$

95,458

 

$

64,622

 

Plus:

depreciation and amortization from continuing operations

 

45,228

 

42,684

 

90,041

 

83,211

 

Plus:

depreciation and amortization from discontinued operations

 

3,454

 

3,102

 

7,004

 

6,086

 

Loss on early extinguishment of debt:

 

 

 

 

 

 

 

 

 

Add:

amount included in expenses

 

—

 

711

 

—

 

711

 

Less:

portion settled in cash

 

—

 

—

 

—

 

—

 

Less:

gain on sale of properties

 

(39,967

)

—

 

(39,967

)

—

 

FFO

 

76,767

 

77,971

 

152,536

 

154,630

 

Less:

preferred distributions

 

(12,667

)

(15,401

)

(25,334

)

(30,802

)

FFO available for common shareholders

 

$

64,100

 

$

62,570

 

$

127,202

 

$

123,828

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — basic

 

225,449

 

211,721

 

225,447

 

211,168

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — diluted (1)

 

254,642

 

240,914

 

254,640

 

240,361

 

 

 

 

 

 

 

 

 

 

 

FFO available for common shareholders per share — basic

 

$

0.28

 

$

0.30

 

$

0.56

 

$

0.59

 

 

 

 

 

 

 

 

 

 

 

FFO available for common shareholders per share — diluted (1)

 

$

0.28

 

$

0.29

 

$

0.55

 

$

0.57

 

 

(1)          At 6/30/2008, we had 15,180 series D preferred shares outstanding that were convertible into 29,193 common shares.  See page 16 for calculations of diluted FFO available for common shareholders and weighted average common shares outstanding.

 

We compute FFO, FFO available for common shareholders and diluted FFO available for common shareholders as shown above.  Our calculation of FFO differs from the National Association of Real Estate Investment Trusts, or NAREIT, definition because we add loss on early extinguishment of debt unless settled in cash.  We consider FFO to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities. We believe that FFO provides useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense and gains or losses on sales of depreciated operating properties, FFO can facilitate a comparison of operating performances among REITs.  FFO does not represent cash generated by operating activities in accordance with GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity.  FFO is one important factor considered by our Board of Trustees in determining the amount of distributions to shareholders.  Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our revolving credit facility and public debt covenants, the availability of debt and equity capital to us and our expectations of future capital requirements and operating performance.

 

15


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

CALCULATION OF DILUTED NET INCOME, FFO AND WEIGHTED AVERAGE

COMMON SHARES OUTSTANDING

(amounts in thousands)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

6/30/2008

 

6/30/2007

 

6/30/2008

 

6/30/2007

 

 

 

 

 

 

 

 

 

 

 

Net income available for common shareholders

 

$

55,385

 

$

16,073

 

$

70,124

 

$

33,820

 

Add — Series D convertible preferred distributions (1)

 

6,167

 

6,167

 

12,334

 

12,334

 

Net income available for common shareholders — diluted

 

$

61,552

 

$

22,240

 

$

82,458

 

$

46,154

 

 

 

 

 

 

 

 

 

 

 

FFO available for common shareholders (2)

 

$

64,100

 

$

62,570

 

$

127,202

 

$

123,828

 

Add — Series D convertible preferred distributions (1)

 

6,167

 

6,167

 

12,334

 

12,334

 

FFO available for common shareholders — diluted

 

$

70,267

 

$

68,737

 

$

139,536

 

$

136,162

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — basic

 

225,449

 

211,721

 

225,447

 

211,168

 

Effect of dilutive Series D preferred shares (1)

 

29,193

 

29,193

 

29,193

 

29,193

 

Weighted average common shares outstanding — diluted

 

254,642

 

240,914

 

254,640

 

240,361

 

 

(1)          As of 6/30/2008, we had 15,180 series D preferred shares outstanding that were convertible into 29,193 common shares.

(2)          See page 15 for calculation of FFO available for common shareholders.

 

16


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

SUMMARY RESULTS OF OPERATIONS BY PROPERTY TYPE

(dollars and sq. ft. in thousands)

 

 

 

As of and For the Three Months Ended (1)

 

As of and For the Six Months Ended (1)

 

 

 

6/30/2008

 

6/30/2007

 

6/30/2008

 

6/30/2007

 

 

 

 

 

 

 

 

 

 

 

Number of Properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

320

 

312

 

320

 

312

 

Industrial and Other

 

169

 

163

 

169

 

163

 

Total

 

489

 

475

 

489

 

475

 

 

 

 

 

 

 

 

 

 

 

CBD

 

45

 

42

 

45

 

42

 

Suburban

 

444

 

433

 

444

 

433

 

Total

 

489

 

475

 

489

 

475

 

 

 

 

 

 

 

 

 

 

 

Square Feet (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

34,326

 

32,807

 

34,326

 

32,807

 

Industrial and Other

 

29,112

 

28,559

 

29,112

 

28,559

 

Total

 

63,438

 

61,366

 

63,438

 

61,366

 

 

 

 

 

 

 

 

 

 

 

CBD

 

12,157

 

10,915

 

12,157

 

10,915

 

Suburban

 

51,281

 

50,451

 

51,281

 

50,451

 

Total

 

63,438

 

61,366

 

63,438

 

61,366

 

 

 

 

 

 

 

 

 

 

 

Percent Leased (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

87.8

%

89.9

%

87.8

%

89.9

%

Industrial and Other

 

94.5

%

96.0

%

94.5

%

96.0

%

Total

 

90.9

%

92.7

%

90.9

%

92.7

%

 

 

 

 

 

 

 

 

 

 

CBD

 

88.7

%

90.3

%

88.7

%

90.3

%

Suburban

 

91.4

%

93.3

%

91.4

%

93.3

%

Total

 

90.9

%

92.7

%

90.9

%

92.7

%

 

 

 

 

 

 

 

 

 

 

Rental Income (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

$

168,122

 

$

162,099

 

$

333,520

 

$

322,611

 

Industrial and Other

 

36,151

 

34,132

 

71,925

 

64,586

 

Total

 

$

204,273

 

$

196,231

 

$

405,445

 

$

387,197

 

 

 

 

 

 

 

 

 

 

 

CBD

 

$

73,136

 

$

67,627

 

$

143,471

 

$

134,254

 

Suburban

 

131,137

 

128,604

 

261,974

 

252,943

 

Total

 

$

204,273

 

$

196,231

 

$

405,445

 

$

387,197

 

 

 

 

 

 

 

 

 

 

 

Property Net Operating Income (NOI) (5):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

$

93,897

 

$

92,765

 

$

187,651

 

$

184,983

 

Industrial and Other

 

26,629

 

25,666

 

52,830

 

47,680

 

Total

 

$

120,526

 

$

118,431

 

$

240,481

 

$

232,663

 

 

 

 

 

 

 

 

 

 

 

CBD

 

$

38,393

 

$

37,364

 

$

76,741

 

$

73,993

 

Suburban

 

82,133

 

81,067

 

163,740

 

158,670

 

Total

 

$

120,526

 

$

118,431

 

$

240,481

 

$

232,663

 

 

 

 

 

 

 

 

 

 

 

NOI Margin (6):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

55.9

%

57.2

%

56.3

%

57.3

%

Industrial and Other

 

73.7

%

75.2

%

73.5

%

73.8

%

Total

 

59.0

%

60.4

%

59.3

%

60.1

%

 

 

 

 

 

 

 

 

 

 

CBD

 

52.5

%

55.3

%

53.5

%

55.1

%

Suburban

 

62.6

%

63.0

%

62.5

%

62.7

%

Total

 

59.0

%

60.4

%

59.3

%

60.1

%

 

(1)

Excludes properties classified in discontinued operations.

(2)

Prior periods exclude space remeasurements made during the current period.

(3)

Percent leased includes (i) space being fitted out for occupancy pursuant to signed leases and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants.

(4)

Includes some triple net lease rental income.

(5)

Property net operating income, or NOI, is defined as property rental income less property operating expenses; see page 14 for calculation of NOI and reconciliation of NOI to Net Income.

(6)

NOI margin is defined as NOI as a percentage of rental income.

 

17


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

SUMMARY RESULTS OF OPERATIONS BY MAJOR MARKET

(dollars and sq. ft. in thousands)

 

 

 

As of and For the Three Months Ended (1)

 

As of and For the Six Months Ended (1)

 

 

 

6/30/2008

 

6/30/2007

 

6/30/2008

 

6/30/2007

 

Number of Properties:

 

 

 

 

 

 

 

 

 

Metro Philadelphia, PA

 

19

 

19

 

19

 

19

 

Oahu, HI

 

57

 

57

 

57

 

57

 

Metro Washington, DC

 

17

 

17

 

17

 

17

 

Metro Boston, MA

 

19

 

17

 

19

 

17

 

Southern California

 

19

 

19

 

19

 

19

 

Metro Austin, TX

 

24

 

24

 

24

 

24

 

Other markets

 

334

 

322

 

334

 

322

 

Total

 

489

 

475

 

489

 

475

 

 

 

 

 

 

 

 

 

 

 

Square Feet (2):

 

 

 

 

 

 

 

 

 

Metro Philadelphia, PA

 

5,274

 

5,291

 

5,274

 

5,291

 

Oahu, HI

 

17,914

 

17,914

 

17,914

 

17,914

 

Metro Washington, DC

 

2,401

 

2,401

 

2,401

 

2,401

 

Metro Boston, MA

 

2,599

 

2,524

 

2,599

 

2,524

 

Southern California

 

1,174

 

1,173

 

1,174

 

1,173

 

Metro Austin, TX

 

2,579

 

2,578

 

2,579

 

2,578

 

Other markets

 

31,497

 

29,485

 

31,497

 

29,485

 

Total

 

63,438

 

61,366

 

63,438

 

61,366

 

 

 

 

 

 

 

 

 

 

 

Percent Leased (3):

 

 

 

 

 

 

 

 

 

Metro Philadelphia, PA

 

87.3

%

89.7

%

87.3

%

89.7

%

Oahu, HI

 

95.2

%

96.9

%

95.2

%

96.9

%

Metro Washington, DC

 

92.1

%

91.2

%

92.1

%

91.2

%

Metro Boston, MA

 

84.7

%

95.5

%

84.7

%

95.5

%

Southern California

 

88.9

%

94.3

%

88.9

%

94.3

%

Metro Austin, TX

 

89.6

%

87.9

%

89.6

%

87.9

%

Other markets

 

89.6

%

91.0

%

89.6

%

91.0

%

Total

 

90.9

%

92.7

%

90.9

%

92.7

%

 

 

 

 

 

 

 

 

 

 

Rental Income (4):

 

 

 

 

 

 

 

 

 

Metro Philadelphia, PA

 

$

29,652

 

$

31,064

 

$

61,300

 

$

61,708

 

Oahu, HI

 

16,755

 

16,143

 

33,618

 

31,495

 

Metro Washington, DC

 

18,174

 

17,370

 

35,825

 

34,556

 

Metro Boston, MA

 

12,099

 

13,708

 

24,005

 

26,313

 

Southern California

 

9,529

 

9,549

 

19,009

 

19,033

 

Metro Austin, TX

 

10,058

 

9,373

 

20,102

 

19,085

 

Other markets

 

108,006

 

99,024

 

211,586

 

195,007

 

Total

 

$

204,273

 

$

196,231

 

$

405,445

 

$

387,197

 

 

 

 

 

 

 

 

 

 

 

Property Net Operating Income (NOI) (5):

 

 

 

 

 

 

 

 

 

Metro Philadelphia, PA

 

$

14,829

 

$

16,010

 

$

31,625

 

$

31,655

 

Oahu, HI

 

12,706

 

12,824

 

25,865

 

25,123

 

Metro Washington, DC

 

11,367

 

10,977

 

22,273

 

22,012

 

Metro Boston, MA

 

7,009

 

8,469

 

13,661

 

16,083

 

Southern California

 

6,493

 

6,511

 

13,120

 

13,167

 

Metro Austin, TX

 

4,964

 

4,355

 

10,341

 

9,144

 

Other markets

 

63,158

 

59,285

 

123,596

 

115,479

 

Total

 

$

120,526

 

$

118,431

 

$

240,481

 

$

232,663

 

 

 

 

 

 

 

 

 

 

 

NOI Margin (6):

 

 

 

 

 

 

 

 

 

Metro Philadelphia, PA

 

50.0

%

51.5

%

51.6

%

51.3

%

Oahu, HI

 

75.8

%

79.4

%

76.9

%

79.8

%

Metro Washington, DC

 

62.5

%

63.2

%

62.2

%

63.7

%

Metro Boston, MA

 

57.9

%

61.8

%

56.9

%

61.1

%

Southern California

 

68.1

%

68.2

%

69.0

%

69.2

%

Metro Austin, TX

 

49.4

%

46.5

%

51.4

%

47.9

%

Other markets

 

58.5

%

59.9

%

58.4

%

59.2

%

Total

 

59.0

%

60.4

%

59.3

%

60.1

%

 

(1)

Excludes properties classified in discontinued operations.

(2)

Prior periods exclude space remeasurements made during the current period.

(3)

Percent leased includes (i) space being fitted out for occupancy pursuant to signed leases and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants.

(4)

Includes some triple net lease rental income.

(5)

Property net operating income, or NOI, is defined as property rental income less property operating expenses; see page 14 for calculation of NOI and reconciliation of NOI to Net Income.

(6)

NOI margin is defined as NOI as a percentage of rental income.

 

We define our major markets as markets which currently, or during either of the last two quarters, constitute 5% or more of our leaseable square feet, rental income or NOI.  Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes properties located in Wilmington, DE.  Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar.  Oahu, HI includes all properties located on the island of Oahu.

 

18


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

SAME PROPERTY RESULTS AND ANALYSIS BY PROPERTY TYPE

(dollars and sq. ft. in thousands)

 

 

 

As of and For the Three Months Ended (1)

 

As of and For the Six Months Ended (2)

 

 

 

6/30/2008

 

6/30/2007

 

6/30/2008

 

6/30/2007

 

Office:

 

 

 

 

 

 

 

 

 

Properties

 

311

 

311

 

307

 

307

 

Total sq. ft.

 

32,712

 

32,712

 

32,321

 

32,321

 

Percent leased (3)

 

87.5

%

89.9

%

87.4

%

89.8

%

Rental income (4)

 

$

161,154

 

$

161,712

 

$

319,997

 

$

320,952

 

Property net operating income (NOI) (5)

 

$

89,833

 

$

92,500

 

$

178,717

 

$

183,595

 

NOI % growth

 

-2.9

%

 

 

-2.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Industrial and Other:

 

 

 

 

 

 

 

 

 

Properties

 

148

 

148

 

148

 

148

 

Total sq. ft.

 

25,144

 

25,144

 

25,144

 

25,144

 

Percent leased (3)

 

93.9

%

96.0

%

93.9

%

96.0

%

Rental income (4)

 

$

31,607

 

$

31,471

 

$

62,975

 

$

61,925

 

Property net operating income (NOI) (5)

 

$

22,678

 

$

23,132

 

$

45,122

 

$

45,146

 

NOI % growth

 

-2.0

%

 

 

-0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

CBD:

 

 

 

 

 

 

 

 

 

Properties

 

42

 

42

 

42

 

42

 

Total sq. ft.

 

10,904

 

10,904

 

10,904

 

10,904

 

Percent leased (3)

 

88.3

%

90.3

%

88.3

%

90.3

%

Rental income (4)

 

$

67,738

 

$

67,627

 

$

135,367

 

$

134,255

 

Property net operating income (NOI) (5)

 

$

35,623

 

$

37,364

 

$

72,325

 

$

73,993

 

NOI % growth

 

-4.7

%

 

 

-2.3

%

 

 

 

 

 

 

 

 

 

 

 

 

Suburban:

 

 

 

 

 

 

 

 

 

Properties

 

417

 

417

 

413

 

413

 

Total sq. ft.

 

46,952

 

46,952

 

46,561

 

46,561

 

Percent leased (3)

 

90.8

%

93.0

%

90.7

%

93.0

%

Rental income (4)

 

$

125,023

 

$

125,556

 

$

247,605

 

$

248,622

 

Property net operating income (NOI) (5)

 

$

76,888

 

$

78,268

 

$

151,514

 

$

154,748

 

NOI % growth

 

-1.8

%

 

 

-2.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Total:

 

 

 

 

 

 

 

 

 

Properties

 

459

 

459

 

455

 

455

 

Total sq. ft.

 

57,856

 

57,856

 

57,465

 

57,465

 

Percent leased (3)

 

90.3

%

92.5

%

90.3

%

92.5

%

Rental income (4)

 

$

192,761

 

$

193,183

 

$

382,972

 

$

382,877

 

Property net operating income (NOI) (5)

 

$

112,511

 

$

115,632

 

$

223,839

 

$

228,741

 

NOI % growth

 

-2.7

%

 

 

-2.1

%

 

 

 

(1)

Based on properties owned continuously since 4/1/2007 and excludes properties classified in discontinued operations.

(2)

Based on properties owned continuously since 1/1/2007 and excludes properties classified in discontinued operations.

(3)

Percent leased includes (i) space being fitted out for occupancy pursuant to signed leases and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants.

(4)

Includes some triple net lease rental income.

(5)

Property net operating income, or NOI, is defined as property rental income less property operating expenses; see page 14 for calculation of NOI and reconciliation of NOI to Net Income.

 

19


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

SAME PROPERTY RESULTS AND ANALYSIS BY MAJOR MARKET

(dollars and sq. ft. in thousands)

 

 

 

As of and For the Three Months Ended (1)

 

As of and For the Six Months Ended (2)

 

 

 

6/30/2008

 

6/30/2007

 

6/30/2008

 

6/30/2007

 

Metro Philadelphia, PA:

 

 

 

 

 

 

 

 

 

Properties

 

19

 

19

 

19

 

19

 

Total sq. ft.

 

5,274

 

5,274

 

5,274

 

5,274

 

Percent leased (3)

 

87.3

%

89.7

%

87.3

%

89.7

%

Rental income (4)

 

$

29,652

 

$

31,064

 

$

61,300

 

$

61,708

 

Property net operating income (NOI) (5)

 

$

14,829

 

$

16,010

 

$

31,625

 

$

31,655

 

NOI % growth

 

-7.4

%

 

 

-0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Oahu, HI:

 

 

 

 

 

 

 

 

 

Properties

 

56

 

56

 

56

 

56

 

Total sq. ft.

 

17,793

 

17,793

 

17,793

 

17,793

 

Percent leased (3)

 

95.6

%

97.5

%

95.6

%

97.5

%

Rental income (4)

 

$

16,613

 

$

16,137

 

$

33,359

 

$

31,490

 

Property net operating income (NOI) (5)

 

$

12,748

 

$

12,841

 

$

25,966

 

$

25,140

 

NOI % growth

 

-0.7

%

 

 

3.3

%

 

 

 

 

 

 

 

 

 

 

 

 

Metro Washington, D.C.:

 

 

 

 

 

 

 

 

 

Properties

 

17

 

17

 

17

 

17

 

Total sq. ft.

 

2,401

 

2,401

 

2,401

 

2,401

 

Percent leased (3)

 

92.1

%

91.2

%

92.1

%

91.2

%

Rental income (4)

 

$

18,174

 

$

17,370

 

$

35,825

 

$

34,556

 

Property net operating income (NOI) (5)

 

$

11,367

 

$

10,977

 

$

22,273

 

$

22,012

 

NOI % growth

 

3.6

%

 

 

1.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Metro Boston, MA:

 

 

 

 

 

 

 

 

 

Properties

 

17

 

17

 

16

 

16

 

Total sq. ft.

 

2,524

 

2,524

 

2,237

 

2,237

 

Percent leased (3)

 

84.3

%

95.5

%

82.3

%

95.0

%

Rental income (4)

 

$

11,832

 

$

13,708

 

$

21,831

 

$

25,472

 

Property net operating income (NOI) (5)

 

$

6,791

 

$

8,469

 

$

11,642

 

$

15,276

 

NOI % growth

 

-19.8

%

 

 

-23.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Southern California:

 

 

 

 

 

 

 

 

 

Properties

 

19

 

19

 

19

 

19

 

Total sq. ft.

 

1,174

 

1,174

 

1,174

 

1,174

 

Percent leased (3)

 

88.9

%

94.3

%

88.9

%

94.3

%

Rental income (4)

 

$

9,529

 

$

9,549

 

$

19,009

 

$

19,033

 

Property net operating income (NOI) (5)

 

$

6,493

 

$

6,511

 

$

13,120

 

$

13,167

 

NOI % growth

 

-0.3

%

 

 

-0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Metro Austin, TX:

 

 

 

 

 

 

 

 

 

Properties

 

24

 

24

 

24

 

24

 

Total sq. ft.

 

2,579

 

2,579

 

2,579

 

2,579

 

Percent leased (3)

 

89.6

%

87.9

%

89.6

%

87.9

%

Rental income (4)

 

$

10,058

 

$

9,373

 

$

20,102

 

$

19,085

 

Property net operating income (NOI) (5)

 

$

4,964

 

$

4,355

 

$

10,341

 

$

9,144

 

NOI % growth

 

14.0

%

 

 

13.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Markets:

 

 

 

 

 

 

 

 

 

Properties

 

307

 

307

 

304

 

304

 

Total sq. ft.

 

26,111

 

26,111

 

26,007

 

26,007

 

Percent leased (3)

 

87.9

%

89.9

%

87.9

%

89.9

%

Rental income (4)

 

$

96,903

 

$

95,982

 

$

191,546

 

$

191,533

 

Property net operating income (NOI) (5)

 

$

55,319

 

$

56,469

 

$

108,872

 

$

112,347

 

NOI % growth

 

-2.0

%

 

 

-3.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Total:

 

 

 

 

 

 

 

 

 

Properties

 

459

 

459

 

455

 

455

 

Total sq. ft.

 

57,856

 

57,856

 

57,465

 

57,465

 

Percent leased (3)

 

90.3

%

92.5

%

90.3

%

92.5

%

Rental income (4)

 

$

192,761

 

$

193,183

 

$

382,972

 

$

382,877

 

Property net operating income (NOI) (5)

 

$

112,511

 

$

115,632

 

$

223,839

 

$

228,741

 

NOI % growth

 

-2.7

%

 

 

-2.1

%

 

 

 

(1)

Based on properties owned continuously since 4/1/2007 and excludes properties classified in discontinued operations.

(2)

Based on properties owned continuously since 1/1/2007 and excludes properties classified in discontinued operations.

(3)

Percent leased includes (i) space being fitted out for occupancy pursuant to signed leases and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants.

(4)

Includes some triple net lease rental income.

(5)

Property net operating income, or NOI, is defined as property rental income less property operating expenses; see page 14 for calculation of NOI and reconciliation of NOI to Net Income.

 

We define our major markets as markets which currently, or during either of the last two quarters, constitute 5% or more of our leaseable square feet, rental income or NOI.  Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes properties located in Wilmington, DE.  Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar.  Oahu, HI includes all properties located on the island of Oahu.

 

20


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

DEBT SUMMARY

(dollars in thousands)

 

 

 

Coupon

 

Interest

 

Principal

 

Maturity

 

Due at

 

Years to

 

 

 

Rate

 

Rate (1)

 

Balance

 

Date

 

Maturity

 

Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured Fixed Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured debt

Two properties in Richland, WA

 

8.000

%

8.000

%

$

1,004

 

11/15/2008

 

$

1,004

 

0.4

 

Secured debt

One property in Buffalo, NY

 

5.170

%

5.170

%

927

 

1/1/2009

 

134

 

0.5

 

Secured debt

See note (2)

 

6.814

%

7.842

%

236,801

 

1/31/2011

 

225,547

 

2.6

 

Secured debt

One property in Milwaukee, WI (3)

 

7.435

%

7.435

%

30,639

 

6/1/2011

 

29,145

 

2.9

 

Secured debt

One property in Bannockburn, IL

 

8.050

%

5.240

%

24,594

 

6/1/2012

 

22,719

 

3.9

 

Secured debt

Two properties in Rochester, NY

 

6.000

%

6.000

%

5,156

 

10/11/2012

 

4,507

 

4.3

 

Secured debt

One property in Decatur, GA (4)

 

6.500

%

6.500

%

4,491

 

1/11/2013

 

4,137

 

4.5

 

Secured debt

One property in Macon, GA

 

4.950

%

6.280

%

13,595

 

5/11/2014

 

11,930

 

5.9

 

Secured debt

One property in Birmingham, AL

 

7.360

%

5.610

%

13,144

 

8/1/2016

 

9,281

 

8.1

 

Secured debt

One property in Syracuse, NY (4)

 

7.310

%

6.030

%

4,244

 

1/1/2022

 

—

 

13.5

 

Secured debt

One property in Syracuse, NY (4)

 

7.850

%

6.030

%

2,069

 

1/1/2022

 

—

 

13.5

 

Secured debt

One property in North Haven, CT

 

6.750

%

5.240

%

4,896

 

3/1/2022

 

—

 

13.7

 

Secured debt

One property in East Windsor, CT (5)

 

5.710

%

5.240

%

9,169

 

3/1/2026

 

—

 

17.7

 

Secured debt

One property in Philadelphia, PA (6)

 

6.794

%

7.383

%

40,757

 

1/1/2029

 

2,478

 

20.5

 

Total / weighted average secured fixed rate debt

 

6.861

%

7.301

%

$

391,486

 

 

 

$

310,882

 

5.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured Floating Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving credit facility (LIBOR + 55 bps) (7)

 

3.517

%

3.517

%

$

301,000

 

8/22/2010

 

$

301,000

 

2.1

 

Senior notes due 2011 (3-MONTH LIBOR + 60 bps) (8)

 

4.290

%

4.290

%

200,000

 

3/16/2011

 

200,000

 

2.7

 

Total / weighted average unsecured floating rate debt

 

3.826

%

3.826

%

$

501,000

 

 

 

$

501,000

 

2.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured Fixed Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior notes due 2010

 

8.875

%

9.000

%

$

30,000

 

8/1/2010

 

$

30,000

 

2.1

 

Senior notes due 2010

 

8.625

%

8.770

%

20,000

 

10/1/2010

 

20,000

 

2.3

 

Senior notes due 2012

 

6.950

%

7.179

%

200,000

 

4/1/2012

 

200,000

 

3.8

 

Senior notes due 2013

 

6.500

%

6.693

%

200,000

 

1/15/2013

 

200,000

 

4.5

 

Senior notes due 2014

 

5.750

%

5.828

%

250,000

 

2/15/2014

 

250,000

 

5.6

 

Senior notes due 2015

 

6.400

%

6.601

%

200,000

 

2/15/2015

 

200,000

 

6.6

 

Senior notes due 2015

 

5.750

%

5.790

%

250,000

 

11/1/2015

 

250,000

 

7.3

 

Senior notes due 2016

 

6.250

%

6.470

%

400,000

 

8/15/2016

 

400,000

 

8.1

 

Senior notes due 2017

 

6.250

%

6.279

%

250,000

 

6/15/2017

 

250,000

 

9.0

 

Senior notes due 2018

 

6.650

%

6.768

%

250,000

 

1/15/2018

 

250,000

 

9.6

 

Total / weighted average unsecured fixed rate debt

 

6.346

%

6.485

%

$

2,050,000

 

 

 

$

2,050,000

 

6.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total / weighted average unsecured debt

 

5.851

%

5.963

%

$

2,551,000

 

 

 

$

2,551,000

 

6.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

Total / weighted average secured fixed rate debt

 

6.861

%

7.301

%

$

391,486

 

 

 

$

310,882

 

5.6

 

Total / weighted average unsecured floating rate debt

 

3.826

%

3.826

%

501,000

 

 

 

501,000

 

2.4

 

Total / weighted average unsecured fixed rate debt

 

6.346

%

6.485

%

2,050,000

 

 

 

2,050,000

 

6.9

 

Total / weighted average debt

 

5.985

%

6.141

%

$

2,942,486

(9)

 

 

$

2,861,882

 

6.0

 

 

(1)

Includes the effect of interest rate protection, mark-to-market accounting for certain assumed mortgages, and discounts on certain mortgages and unsecured notes. Excludes effects of offering and transaction costs.

(2)

Eight properties in Austin, TX, one property in Philadelphia, PA, two properties in Los Angeles, CA and two properties in Washington, DC.

(3)

The loan becomes prepayable on 2/1/2011.

(4)

These non-recourse mortgages encumber properties held for sale; total mortgage debt on properties held for sale as of 6/30/2008, net of unamortizated premiums and discounts, equals $11,339.

(5)

The loan becomes prepayable on 2/7/2016.

(6)

The loan becomes prepayable on 1/31/2011. On 1/31/2011, the interest rate increases to 8.794% and the loan becomes subject to accelerated amortization. We currently intend to prepay this loan in 2011.

(7)

Interest rate is weighted average based on amounts outstanding during 2008. Interest rate on amounts outstanding as of 6/30/2008 is 3.1%.

(8)

The notes became prepayable, at par, on September 16, 2006. Interest rate is weighted average based on amounts outstanding during 2008. Interest rate on amounts outstanding as of 6/30/2008 is 3.4%.

(9)

Total debt as of 6/30/2008, net of unamortized premiums and discounts, equals $2,932,959.

 

21


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

DEBT MATURITY SCHEDULE

(dollars in thousands)

 

 

 

Scheduled Principal Payments During Period

 

 

 

 

 

Secured

 

Unsecured

 

Unsecured

 

 

 

Weighted

 

 

 

Fixed Rate

 

Floating

 

Fixed

 

 

 

Average

 

Year

 

Debt

 

Rate Debt

 

Rate Debt

 

Total (1)

 

Interest Rate

 

2008

 

$

5,468

 

$

—

 

$

—

 

$

5,468

 

6.8

%

2009

 

7,934

 

—

 

—

 

7,934

 

6.8

%

2010

 

8,357

 

301,000

 

50,000

 

359,357

 

4.3

%

2011

 

258,821

 

200,000

 

—

 

458,821

 

5.8

%

2012

 

30,566

 

—

 

200,000

 

230,566

 

7.0

%

2013

 

7,243

 

—

 

200,000

 

207,243

 

6.5

%

2014

 

15,027

 

—

 

250,000

 

265,027

 

5.7

%

2015

 

3,200

 

—

 

450,000

 

453,200

 

6.0

%

2016

 

12,490

 

—

 

400,000

 

412,490

 

6.3

%

2017

 

3,002

 

—

 

250,000

 

253,002

 

6.3

%

2018 and thereafter

 

39,378

 

—

 

250,000

 

289,378

 

6.7

%

Total

 

$

391,486

 

$

501,000

 

$

2,050,000

 

$

2,942,486

 

6.0

%

Percent

 

13.3

%

17.0

%

69.7

%

100.0

%

 

 

 

(1)   Total debt as of 6/30/2008, net of unamortized premiums and discounts, equals $2,932,959.

 

22


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS

 

 

 

As of and For the Three Months Ended

 

 

 

6/30/2008

 

3/31/2008

 

12/31/2007

 

9/30/2007

 

6/30/2007

 

Leverage Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt / total assets

 

48.9

%

48.9

%

47.3

%

46.1

%

45.5

%

Total debt / gross book value of real estate assets (1)

 

45.0

%

44.8

%

43.6

%

42.7

%

42.2

%

Total debt / total market capitalization

 

58.5

%

58.4

%

54.4

%

48.0

%

46.4

%

Total debt / total book capitalization

 

50.5

%

50.4

%

48.9

%

47.7

%

46.9

%

Secured debt / total assets

 

6.5

%

6.1

%

6.7

%

6.9

%

7.1

%

Variable rate debt / total debt

 

17.1

%

17.4

%

12.3

%

8.9

%

15.8

%

Variable rate debt / total assets

 

8.3

%

8.5

%

5.8

%

4.1

%

7.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Coverage Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA / interest expense

 

2.7x

 

2.7x

 

2.7x

 

2.7x

 

2.8x

 

EBITDA / interest expense + preferred distributions

 

2.1x

 

2.1x

 

2.0x

 

2.0x

 

2.1x

 

 

 

 

 

 

 

 

 

 

 

 

 

Public Debt Covenants (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt / adjusted total assets (maximum 60%)

 

43.5

%

43.7

%

42.6

%

41.7

%

41.3

%

Secured debt / adjusted total assets (maximum 40%)

 

5.8

%

5.5

%

6.1

%

6.2

%

6.5

%

Consolidated income available for debt service / debt service (minimum 1.5x)

 

2.7x

 

2.6x

 

2.7x

 

2.8x

 

2.9x

 

Total unencumbered assets / unsecured debt (minimum 150% / 200%)

 

227.4

%

229.0

%

234.9

%

241.2

%

244.6

%

 

(1)

Gross book value of real estate assets is real estate properties, at cost, including properties held for sale and purchase price allocations less impairment writedowns, if any.

(2)

Adjusted total assets and unencumbered assets includes original cost of real estate assets and excludes depreciation and amortization, accounts receivable and other intangible assets. Consolidated income available for debt service is earnings from operations excluding interest expense, depreciation and amortization, taxes, and gains and losses on sales of assets, determined together with debt service on a pro forma basis for the four consecutive fiscal quarters most recently ended.

 

23


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

TENANT IMPROVEMENTS, LEASING COSTS AND CAPITAL IMPROVEMENTS

(dollars and sq. ft. in thousands, except per sq. ft. data)

 

 

 

For the Three Months Ended

 

 

 

6/30/2008

 

3/31/2008

 

12/31/2007

 

9/30/2007

 

6/30/2007

 

Tenant improvements (TI)

 

$

9,601

 

$

5,178

 

$

20,714

 

$

9,651

 

$

16,015

 

Leasing costs (LC)

 

4,091

 

3,859

 

3,156

 

6,876

 

7,167

 

Total TI and LC

 

13,692

 

9,037

 

23,870

 

16,527

 

23,182

 

 

 

 

 

 

 

 

 

 

 

 

 

Building improvements (1)

 

2,953

 

1,789

 

5,893

 

3,048

 

3,089

 

Development, redevelopment and other activities (2)

 

2,955

 

3,491

 

6,957

 

5,568

 

15,883

 

Total capital improvements, including TI and LC

 

$

19,600

 

$

14,317

 

$

36,720

 

$

25,143

 

$

42,154

 

 

 

 

 

 

 

 

 

 

 

 

 

Sq. ft. beginning of period

 

65,315

 

64,456

 

63,928

 

63,571

 

60,251

 

Sq. ft. end of period

 

65,247

 

65,315

 

64,456

 

63,928

 

63,571

 

Average sq. ft. during period

 

65,281

 

64,886

 

64,192

 

63,750

 

61,911

 

 

 

 

 

 

 

 

 

 

 

 

 

Building improvements per average sq. ft. during period

 

$

0.05

 

$

0.03

 

$

0.09

 

$

0.05

 

$

0.05

 

 

(1)

Building improvements generally include construction costs, expenditures to replace obsolete building components, and expenditures that extend the useful life of existing assets.

(2)

Development, redevelopment and other activities generally include non-recurring expenditures or expenditures that we believe increase the value of our existing properties.

 

24


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

2008 ACQUISITIONS AND DISPOSITIONS INFORMATION

(dollars and sq. ft. in thousands, except per sq. ft. amounts)

 

Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase

 

 

 

Remaining

 

 

 

 

 

Date

 

 

 

Office/

 

Number of

 

 

 

Purchase

 

Price (1) /

 

Cap

 

Lease

 

Percent

 

 

 

Acquired

 

Location

 

Industrial/Other

 

Properties

 

Sq. Ft.

 

Price (1)

 

Sq. Ft.

 

Rate (2)

 

Term (3)

 

Leased (4)

 

Major Tenant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Feb-08

 

Cleveland, OH

 

Office

 

2

 

878

 

$

123,700

 

$

140.89

 

9.0

%

8.2

 

90.7

%

Jones Day

 

 

 

Q1 2008 Total / Weighted Average

 

 

 

2

 

878

 

123,700

 

140.89

 

9.0

%

8.2

 

90.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jun-08

 

Milwaukee, WI

 

Office

 

1

 

374

 

53,050

 

141.84

 

9.1

%

6.1

 

96.8

%

Marshall and Ilsley Trust Co

 

 

 

Q2 2008 Total / Weighted Average

 

 

 

1

 

374

 

53,050

 

141.84

 

9.1

%

6.1

 

96.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total / Weighted Average

 

 

 

3

 

1,252

 

$

176,750

 

$

141.17

 

9.0

%

6.8

 

92.5

%

 

 

 

Dispositions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sale Price

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Original

 

Multiple

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Original

 

Sale

 

Purchase

 

of Original

 

Book

 

Date

 

 

 

Office/

 

Number of

 

 

 

Sale

 

Purchase

 

Price (1) /

 

Price (1) /

 

Purchase

 

Gain (Loss)

 

Sold

 

Location

 

Industrial/Other

 

Properties

 

Sq. Ft.

 

Price (1)

 

Price (1)

 

Sq. Ft.

 

Sq. Ft.

 

Price

 

on Sale

 

 

 

 

 

 

 

 

 

 

 

There were no dispositions during the three months ended March 31, 2008.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jun-08

 

Pittsburgh, PA

 

Office

 

1

 

75

 

$

15,002

 

$

10,100

 

$

200.03

 

$

134.67

 

1.5x

 

$

5,308

 

Jun-08

 

Fort Washington, PA

 

Office

 

1

 

124

 

9,594

 

6,794

 

77.37

 

54.79

 

1.4x

 

4,495

 

Jun-08

 

Lincoln, RI

 

Office

 

1

 

62

 

12,336

 

8,000

 

198.97

 

129.03

 

1.5x

 

5,173

 

Jun-08

 

Austin, TX

 

Office

 

1

 

71

 

28,134

 

7,200

 

396.25

 

101.41

 

3.9x

 

16,185

 

Jun-08

 

Irving, TX

 

Office

 

1

 

117

 

18,713

 

8,414

 

159.94

 

71.91

 

2.2x

 

8,806

 

 

 

Q2 2008 Total / Weighted Average

 

 

 

5

 

449

 

83,779

 

40,508

 

186.59

 

90.22

 

2.1x

 

39,967

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

5

 

449

 

$

83,779

 

$

40,508

 

$

186.59

 

$

90.22

 

2.1x

 

$

39,967

 

 

(1)       Represents the gross contract purchase or sale price and excludes closing costs and purchase price allocations.

(2)       Represents the ratio of the estimated current GAAP based annual rental income less property operating expenses to the Purchase Price on the date of acquisition.

(3)       Average remaining lease term based on rental income as of the date acquired.

(4)       Percent leased as of the date acquired.

 

25


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

2008 FINANCING ACTIVITIES

(amounts in thousands)

 

 

 

For the Three
Months Ended
6/30/2008

 

For the Three
Months Ended
3/31/2008

 

 

 

 

 

 

 

Debt Transactions (1):

 

 

 

 

 

New debt raised

 

$

—

 

$

—

 

New debt assumed as part of acquisitions

 

$

30,639

 

$

—

 

Total new debt

 

30,639

 

—

 

 

 

 

 

 

 

Debt retired

 

$

—

 

$

(28,600

)

Net debt

 

$

30,639

 

$

(28,600

)

 

 

 

 

 

 

Equity Transactions:

 

 

 

 

 

New common shares issued

 

—

 

—

 

New common equity raised, net

 

$

—

 

$

—

 

 

 

 

 

 

 

New preferred shares issued

 

—

 

—

 

New preferred equity raised, net

 

$

—

 

$

—

 

Total new equity

 

$

—

 

$

—

 

 

 

 

 

 

 

Preferred equity retired

 

$

—

 

$

—

 

Net equity

 

$

—

 

$

—

 

 

(1) Excludes drawings and repayments on our revolving credit facility.

 

26


 

PORTFOLIO AND LEASING INFORMATION

 


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

PORTFOLIO SUMMARY BY PROPERTY TYPE, TENANT AND MAJOR MARKET (SQUARE FEET) (1)

(sq. ft. in thousands)

 

 

 

Metro

 

 

 

Metro

 

Metro

 

Southern

 

Metro

 

Other

 

 

 

 

 

Philadelphia, PA

 

Oahu, HI

 

Washington, DC

 

Boston, MA

 

California

 

Austin, TX

 

Markets

 

Total

 

Square Feet:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

5,274

 

—

 

2,401

 

2,599

 

1,174

 

1,342

 

21,536

 

34,326

 

Industrial and Other

 

—

 

17,914

 

—

 

—

 

—

 

1,237

 

9,961

 

29,112

 

Total

 

5,274

 

17,914

 

2,401

 

2,599

 

1,174

 

2,579

 

31,497

 

63,438

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CBD

 

4,574

 

158

 

681

 

523

 

331

 

115

 

5,775

 

12,157

 

Suburban

 

700

 

17,756

 

1,720

 

2,076

 

843

 

2,464

 

25,722

 

51,281

 

Total

 

5,274

 

17,914

 

2,401

 

2,599

 

1,174

 

2,579

 

31,497

 

63,438

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government and other government tenants (2)

 

11

 

—

 

1,240

 

211

 

366

 

15

 

3,515

 

5,358

 

Land leases (2)

 

—

 

16,636

 

—

 

—

 

—

 

—

 

—

 

16,636

 

Other investment grade tenants (2)(3)

 

2,372

 

2

 

67

 

832

 

76

 

222

 

8,190

 

11,761

 

Other tenants (2)

 

2,219

 

420

 

904

 

1,160

 

602

 

2,073

 

16,526

 

23,904

 

Vacant

 

672

 

856

 

190

 

396

 

130

 

269

 

3,266

 

5,779

 

Total

 

5,274

 

17,914

 

2,401

 

2,599

 

1,174

 

2,579

 

31,497

 

63,438

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent by Major Market:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

15

%

0

%

7

%

8

%

3

%

4

%

63

%

100

%

Industrial and Other

 

0

%

62

%

0

%

0

%

0

%

4

%

34

%

100

%

Total

 

8

%

28

%

4

%

4

%

2

%

4

%

50

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CBD

 

38

%

1

%

6

%

4

%

3

%

1

%

47

%

100

%

Suburban

 

1

%

35

%

3

%

4

%

2

%

5

%

50

%

100

%

Total

 

8

%

28

%

4

%

4

%

2

%

4

%

50

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government and other government tenants

 

0

%

0

%

23

%

4

%

7

%

0

%

66

%

100

%

Land leases

 

0

%

100

%

0

%

0

%

0

%

0

%

0

%

100

%

Other investment grade tenants (3)

 

20

%

0

%

1

%

7

%

1

%

2

%

69

%

100

%

Other tenants

 

9

%

2

%

4

%

5

%

2

%

9

%

69

%

100

%

Vacant

 

12

%

15

%

3

%

7

%

2

%

5

%

56

%

100

%

Total

 

8

%

28

%

4

%

4

%

2

%

4

%

50

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent by Property Type and Tenant:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

100

%

0

%

100

%

100

%

100

%

52

%

68

%

54

%

Industrial and Other

 

0

%

100

%

0

%

0

%

0

%

48

%

32

%

46

%

Total

 

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CBD

 

87

%

1

%

28

%

20

%

28

%

5

%

18

%

19

%

Suburban

 

13

%

99

%

72

%

80

%

72

%

95

%

82

%

81

%

Total

 

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government and other government tenants

 

0

%

0

%

52

%

8

%

31

%

1

%

11

%

8

%

Land leases

 

0

%

93

%

0

%

0

%

0

%

0

%

0

%

26

%

Other investment grade tenants (3)

 

45

%

0

%

3

%

32

%

7

%

9

%

26

%

19

%

Other tenants

 

42

%

2

%

37

%

45

%

51

%

80

%

53

%

38

%

Vacant

 

13

%

5

%

8

%

15

%

11

%

10

%

10

%

9

%

Total

 

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

 

(1)       Excludes properties classified in discontinued operations.

(2)       Sq. ft. is pursuant to signed leases as of 6/30/2008, and includes (i) space being fitted out for occupancy and (ii) space which is leased, but is not occupied or is being offered for sublease.

(3)       Excludes investment grade tenants included above.

 

We define our major markets as markets which currently, or during either of the last two quarters, constitute 5% or more of our leaseable square feet, rental income or NOI.  Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes properties located in Wilmington, DE.  Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar.  Oahu, HI includes all properties located on the island of Oahu.

 

28


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

PORTFOLIO SUMMARY BY PROPERTY TYPE, TENANT AND MAJOR MARKET (ANNUALIZED RENTAL INCOME) (1)

(dollars in thousands)

 

 

 

Metro

 

 

 

Metro

 

Metro

 

Southern

 

Metro

 

Other

 

 

 

 

 

Philadelphia, PA

 

Oahu, HI

 

Washington, DC

 

Boston, MA

 

California

 

Austin, TX

 

Markets

 

Total

 

Annualized Rental Income (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

$

122,008

 

$

—

 

$

71,044

 

$

51,362

 

$

38,152

 

$

27,004

 

$

376,171

 

$

685,741

 

Industrial and Other

 

—

 

66,860

 

—

 

—

 

—

 

13,281

 

63,549

 

143,690

 

Total

 

$

122,008

 

$

66,860

 

$

71,044

 

$

51,362

 

$

38,152

 

$

40,285

 

$

439,720

 

$

829,431

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CBD

 

$

111,640

 

$

1,255

 

$

28,769

 

$

20,587

 

$

22,433

 

$

2,351

 

$

112,332

 

$

299,367

 

Suburban

 

10,368

 

65,605

 

42,275

 

30,775

 

15,719

 

37,934

 

327,388

 

530,064

 

Total

 

$

122,008

 

$

66,860

 

$

71,044

 

$

51,362

 

$

38,152

 

$

40,285

 

$

439,720

 

$

829,431

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government and other government tenants

 

$

251

 

$

—

 

$

39,879

 

$

5,237

 

$

7,849

 

$

253

 

$

66,644

 

$

120,113

 

Land leases

 

—

 

60,590

 

—

 

—

 

—

 

—

 

—

 

60,590

 

Other investment grade tenants (3)

 

63,866

 

258

 

2,307

 

14,735

 

1,931

 

3,470

 

137,422

 

223,989

 

Other tenants

 

57,891

 

6,012

 

28,858

 

31,390

 

28,372

 

36,562

 

235,654

 

424,739

 

Total

 

$

122,008

 

$

66,860

 

$

71,044

 

$

51,362

 

$

38,152

 

$

40,285

 

$

439,720

 

$

829,431

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent by Major Market:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

18

%

0

%

10

%

7

%

6

%

4

%

55

%

100

%

Industrial and Other

 

0

%

47

%

0

%

0

%

0

%

9

%

44

%

100

%

Total

 

15

%

8

%

8

%

6

%

5

%

5

%

53

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CBD

 

37

%

0

%

10

%

7

%

7

%

1

%

38

%

100

%

Suburban

 

2

%

12

%

8

%

6

%

3

%

7

%

62

%

100

%

Total

 

15

%

8

%

8

%

6

%

5

%

5

%

53

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government and other government tenants

 

0

%

0

%

33

%

4

%

7

%

0

%

56

%

100

%

Land leases

 

0

%

100

%

0

%

0

%

0

%

0

%

0

%

100

%

Other investment grade tenants (3)

 

29

%

0

%

1

%

7

%

1

%

1

%

61

%

100

%

Other tenants

 

14

%

1

%

7

%

7

%

7

%

9

%

55

%

100

%

Total

 

15

%

8

%

8

%

6

%

5

%

5

%

53

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent by Property Type and Tenant:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

100

%

0

%

100

%

100

%

100

%

67

%

85

%

83

%

Industrial and Other

 

0

%

100

%

0

%

0

%

0

%

33

%

15

%

17

%

Total

 

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CBD

 

92

%

2

%

40

%

40

%

59

%

6

%

26

%

36

%

Suburban

 

8

%

98

%

60

%

60

%

41

%

94

%

74

%

64

%

Total

 

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government and other government tenants

 

0

%

0

%

56

%

10

%

21

%

1

%

15

%

15

%

Land leases

 

0

%

91

%

0

%

0

%

0

%

0

%

0

%

7

%

Other investment grade tenants (3)

 

52

%

0

%

3

%

29

%

5

%

8

%

31

%

27

%

Other tenants

 

48

%

9

%

41

%

61

%

74

%

91

%

54

%

51

%

Total

 

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

 

(1)       Excludes properties classified in discontinued operations.

(2)       Annualized rental income is rents pursuant to signed leases as of 6/30/2008, plus expense reimbursements; includes some triple net lease rents and excludes lease value amortization.

(3)       Excludes investment grade tenants included above.

 

We define our major markets as markets which currently, or during either of the last two quarters, constitute 5% or more of our leaseable square feet, rental income or NOI.  Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes properties located in Wilmington, DE.  Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar.  Oahu, HI includes all properties located on the island of Oahu.

 

29


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

SUMMARY OF PROPERTIES BY MAJOR MARKET (1)

(dollars and sq. ft. in thousands)

 

 

 

As of 6/30/2008

 

Annualized

 

% of Annualized

 

Market

 

Properties

 

Sq. Ft.

 

% Sq. Ft.

 

Rental Income (2)

 

Rental Income (2)

 

Metro Philadelphia, PA

 

19

 

5,274

 

8.3

%

$

122,008

 

14.7

%

Oahu, HI

 

57

 

17,914

 

28.2

%

66,860

 

8.1

%

Metro Washington, DC

 

17

 

2,401

 

3.8

%

71,044

 

8.6

%

Metro Boston, MA

 

19

 

2,599

 

4.1

%

51,362

 

6.2

%

Southern California

 

19

 

1,174

 

1.9

%

38,152

 

4.6

%

Metro Austin, TX

 

24

 

2,579

 

4.1

%

40,285

 

4.8

%

Other markets

 

334

 

31,497

 

49.6

%

439,720

 

53.0

%

Total

 

489

 

63,438

 

100.0

%

$

829,431

 

100.0

%

 

 

 

Percent NOI For the Three Months Ended (3)

 

 

 

6/30/2008

 

3/31/2008

 

12/31/2007

 

9/30/2007

 

6/30/2007

 

Metro Philadelphia, PA

 

12.3

%

13.2

%

12.4

%

12.8

%

12.7

%

Oahu, HI

 

10.6

%

10.1

%

9.6

%

10.1

%

9.9

%

Metro Washington, DC

 

9.4

%

9.4

%

9.6

%

9.5

%

9.6

%

Metro Boston, MA

 

5.8

%

6.6

%

8.6

%

8.3

%

8.3

%

Southern California

 

5.4

%

6.9

%

6.7

%

6.9

%

7.0

%

Metro Austin, TX

 

4.1

%

4.8

%

4.2

%

4.5

%

4.0

%

Other markets

 

52.4

%

49.0

%

48.9

%

47.9

%

48.5

%

Total

 

100.0

%

100.0

%

100.0

%

100.0

%

100.0

%

 

(1)       Excludes properties classified in discontinued operations.

(2)       Annualized rental income is rents pursuant to signed leases as of 6/30/2008, plus expense reimbursements; includes some triple net lease rents and excludes lease value amortization.

(3)       NOI, or property net operating income, is defined as property rental income less property operating expenses; see page 14 for calculation of NOI and reconciliation of NOI to Net Income.  Current period (6/30/2008) excludes properties classified in discontinued operations;  prior periods reflect amounts previously reported and includes properties reclassified in discontinued operations in the current period.

 

We define our major markets as markets which currently, or during either of the last two quarters, constitute 5% or more of our leaseable square feet, rental income or NOI.  Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes properties located in Wilmington, DE.  Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar.  Oahu, HI includes all properties located on the island of Oahu.

 

30


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

LEASING SUMMARY (1)

(dollars and sq. ft. in thousands, except per sq. ft. data)

 

 

 

As of and For the Three Months Ended

 

 

 

6/30/2008

 

3/31/2008

 

12/31/2007

 

9/30/2007

 

6/30/2007

 

Properties

 

489

 

537

 

535

 

530

 

524

 

Total sq. ft. (2)

 

63,438

 

65,315

 

64,456

 

63,928

 

63,571

 

Percentage leased

 

90.9

%

91.6

%

92.9

%

92.8

%

92.9

%

 

 

 

 

 

 

 

 

 

 

 

 

Leasing Activity (sq. ft.):

 

 

 

 

 

 

 

 

 

 

 

New leases

 

379

 

273

 

405

 

248

 

814

 

Renewals

 

1,316

 

553

 

833

 

1,235

 

1,107

 

Total

 

1,695

 

826

 

1,238

 

1,483

 

1,921

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change in GAAP Rent (3):

 

 

 

 

 

 

 

 

 

 

 

New leases

 

23

%

2

%

12

%

26

%

8

%

Renewals

 

5

%

3

%

2

%

6

%

0

%

Weighted average

 

9

%

2

%

5

%

9

%

3

%

 

 

 

 

 

 

 

 

 

 

 

 

Capital Commitments (4):

 

 

 

 

 

 

 

 

 

 

 

New leases

 

$

9,039

 

$

6,325

 

$

6,583

 

$

3,420

 

$

24,074

 

Renewals

 

4,252

 

3,091

 

4,969

 

14,204

 

10,936

 

Total

 

$

13,291

 

$

9,416

 

$

11,552

 

$

17,624

 

$

35,010

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Commitments per Sq. Ft. (4):

 

 

 

 

 

 

 

 

 

 

 

New leases

 

$

23.85

 

$

23.17

 

$

16.25

 

$

13.79

 

$

29.57

 

Renewals

 

$

3.23

 

$

5.59

 

$

5.97

 

$

11.50

 

$

9.88

 

Total

 

$

7.84

 

$

11.40

 

$

9.33

 

$

11.88

 

$

18.22

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Lease Term by Sq. Ft. (years):

 

 

 

 

 

 

 

 

 

 

 

New leases

 

6.3

 

6.0

 

6.3

 

5.0

 

8.2

 

Renewals

 

5.4

 

5.4

 

5.3

 

8.3

 

7.7

 

Total

 

5.6

 

5.6

 

5.6

 

7.7

 

7.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Commitments per Sq. Ft. per Year:

 

 

 

 

 

 

 

 

 

 

 

New leases

 

$

3.79

 

$

3.86

 

$

2.58

 

$

2.76

 

$

3.61

 

Renewals

 

$

0.60

 

$

1.04

 

$

1.13

 

$

1.39

 

$

1.28

 

Total

 

$

1.40

 

$

2.04

 

$

1.67

 

$

1.54

 

$

2.31

 

 

(1)       Current period (6/30/2008) excludes properties classified in discontinued operations.  Prior periods reflect amounts previously reported and includes properties classified in discontinued operations in the current period.

(2)       Sq. ft. measurements are subject to modest changes when space is re-measured or re-configured for new tenants.

(3)       Percent difference in prior rents charged for same space.  Rents include expense reimbursements and exclude lease value amortization.

(4)       Represents commitments to tenant improvements (TI) and leasing costs (LC).

 

The above leasing summary is based on leases executed during the periods indicated.

 

31


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

OCCUPANCY AND LEASING ANALYSIS BY PROPERTY TYPE AND MAJOR MARKET (3 MONTHS ENDED 6/30/2008) (1)

(dollars and sq. ft. in thousands)

 

 

 

Total Sq. Ft.

 

Sq. Ft. Leases Executed During

 

 

 

As of

 

Three Months Ended 6/30/2008

 

Property Type/Market

 

6/30/2008

 

New

 

Renewals

 

Total

 

Office

 

34,326

 

311

 

759

 

1,070

 

Industrial and Other

 

29,112

 

68

 

557

 

625

 

Total

 

63,438

 

379

 

1,316

 

1,695

 

 

 

 

 

 

 

 

 

 

 

CBD

 

12,157

 

67

 

162

 

229

 

Suburban

 

51,281

 

312

 

1,154

 

1,466

 

Total

 

63,438

 

379

 

1,316

 

1,695

 

 

 

 

 

 

 

 

 

 

 

Metro Philadelphia, PA

 

5,274

 

5

 

102

 

107

 

Oahu, HI

 

17,914

 

—

 

65

 

65

 

Metro Washington, DC

 

2,401

 

36

 

15

 

51

 

Metro Boston, MA

 

2,599

 

11

 

—

 

11

 

Southern California

 

1,174

 

12

 

13

 

25

 

Metro Austin, TX

 

2,579

 

28

 

25

 

53

 

Other markets

 

31,497

 

287

 

1,096

 

1,383

 

Total

 

63,438

 

379

 

1,316

 

1,695

 

 

 

 

Sq. Ft. Leased

 

 

 

As of

 

3/31/2008

 

 

 

New and

 

Acquisitions /

 

As of

 

6/30/2008

 

 

 

3/31/2008

 

% Leased (2)

 

Expired

 

Renewals

 

(Sales)

 

6/30/2008

 

% Leased

 

Office

 

32,258

 

89.1

%

(1,315

)

1,070

 

(1,862

)

30,151

 

87.8

%

Industrial and Other

 

27,585

 

94.8

%

(702

)

625

 

—

 

27,508

 

94.5

%

Total

 

59,843

 

91.6

%

(2,017

)

1,695

 

(1,862

)

57,659

 

90.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CBD

 

11,135

 

90.2

%

(396

)

229

 

(184

)

10,784

 

88.7

%

Suburban

 

48,708

 

91.9

%

(1,621

)

1,466

 

(1,678

)

46,875

 

91.4

%

Total

 

59,843

 

91.6

%

(2,017

)

1,695

 

(1,862

)

57,659

 

90.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metro Philadelphia, PA

 

4,909

 

90.5

%

(260

)

107

 

(154

)

4,602

 

87.3

%

Oahu, HI

 

17,040

 

95.1

%

(46

)

65

 

—

 

17,059

 

95.2

%

Metro Washington, DC

 

2,435

 

91.6

%

(36

)

51

 

(240

)

2,210

 

92.1

%

Metro Boston, MA

 

2,699

 

87.1

%

(6

)

11

 

(502

)

2,202

 

84.7

%

Southern California

 

1,375

 

95.2

%

(86

)

25

 

(270

)

1,044

 

88.9

%

Metro Austin, TX

 

2,448

 

89.7

%

(46

)

53

 

(144

)

2,311

 

89.6

%

Other markets

 

28,937

 

90.3

%

(1,537

)

1,383

 

(552

)

28,231

 

89.6

%

Total

 

59,843

 

91.6

%

(2,017

)

1,695

 

(1,862

)

57,659

 

90.9

%

 

(1)       Excludes properties classified in discontinued operations.

(2)       Based on total sq. ft. as of March 31, 2008; excludes acquisitions and effects of space remeasurements during the period.

 

We define our major markets as markets which currently, or during either of the last two quarters, constitute 5% or more of our leaseable square feet, rental income or NOI.  Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes Wilmington, DE.  Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar.  Oahu, HI includes all properties located on the island of Oahu.

 

32


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

OCCUPANCY AND LEASING ANALYSIS BY PROPERTY TYPE AND MAJOR MARKET (6 MONTHS ENDED 6/30/2008) (1)

(dollars and sq. ft. in thousands)

 

 

 

Total Sq. Ft.

 

Sq. Ft. Leases Executed During

 

 

 

As of

 

Six Months Ended 6/30/2008

 

Property Type/Market

 

6/30/2008

 

New

 

Renewals

 

Total

 

Office

 

34,326

 

563

 

1,087

 

1,650

 

Industrial and Other

 

29,112

 

89

 

782

 

871

 

Total

 

63,438

 

652

 

1,869

 

2,521

 

 

 

 

 

 

 

 

 

 

 

CBD

 

12,157

 

151

 

287

 

438

 

Suburban

 

51,281

 

501

 

1,582

 

2,083

 

Total

 

63,438

 

652

 

1,869

 

2,521

 

 

 

 

 

 

 

 

 

 

 

Metro Philadelphia, PA

 

5,274

 

53

 

119

 

172

 

Oahu, HI

 

17,914

 

6

 

65

 

71

 

Metro Washington, DC

 

2,401

 

46

 

16

 

62

 

Metro Boston, MA

 

2,599

 

15

 

3

 

18

 

Southern California

 

1,174

 

43

 

77

 

120

 

Metro Austin, TX

 

2,579

 

54

 

29

 

83

 

Other markets

 

31,497

 

435

 

1,560

 

1,995

 

Total

 

63,438

 

652

 

1,869

 

2,521

 

 

 

 

Sq. Ft. Leased

 

 

 

As of

 

12/31/2007

 

 

 

New and

 

Acquisitions /

 

As of

 

6/30/2008

 

 

 

12/31/2007

 

% Leased (2)

 

Expired

 

Renewals

 

(Sales)

 

6/30/2008

 

% Leased

 

Office

 

31,824

 

90.0

%

(2,258

)

1,650

 

(1,065

)

30,151

 

87.8

%

Industrial and Other

 

28,073

 

96.4

%

(1,436

)

871

 

—

 

27,508

 

94.5

%

Total

 

59,897

 

92.9

%

(3,694

)

2,521

 

(1,065

)

57,659

 

90.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CBD

 

10,359

 

90.2

%

(626

)

438

 

613

 

10,784

 

88.7

%

Suburban

 

49,538

 

93.5

%

(3,068

)

2,083

 

(1,678

)

46,875

 

91.4

%

Total

 

59,897

 

92.9

%

(3,694

)

2,521

 

(1,065

)

57,659

 

90.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metro Philadelphia, PA

 

4,898

 

90.0

%

(314

)

172

 

(154

)

4,602

 

87.3

%

Oahu, HI

 

17,453

 

97.4

%

(465

)

71

 

—

 

17,059

 

95.2

%

Metro Washington, DC

 

2,427

 

91.3

%

(39

)

62

 

(240

)

2,210

 

92.1

%

Metro Boston, MA

 

2,990

 

96.5

%

(304

)

18

 

(502

)

2,202

 

84.7

%

Southern California

 

1,354

 

93.8

%

(160

)

120

 

(270

)

1,044

 

88.9

%

Metro Austin, TX

 

2,463

 

90.3

%

(91

)

83

 

(144

)

2,311

 

89.6

%

Other markets

 

28,312

 

90.8

%

(2,321

)

1,995

 

245

 

28,231

 

89.6

%

Total

 

59,897

 

92.9

%

(3,694

)

2,521

 

(1,065

)

57,659

 

90.9

%

 

(1)       Current period (6/30/2008) excludes properties classified in discontinued operations.  Prior periods reflects amounts previously reported and includes properties classifed in discontinued operations in the current period.

(2)       Based on total sq. ft. as of December 31, 2007; excludes acquisitions and effects of space remeasurements during the period.

 

We define our major markets as markets which currently, or during either of the last two quarters, constitute 5% or more of our leaseable square feet, rental income or NOI.  Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes Wilmington, DE.  Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar.  Oahu, HI includes all properties located on the island of Oahu.

 

33


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

TENANTS REPRESENTING 1% OR MORE OF TOTAL RENT (1)

(sq. ft. in thousands)

 

 

 

 

 

% of Total

 

% of Rental

 

 

 

Tenant

 

Sq. Ft. (2)

 

Sq. Ft. (2)

 

Income (3)

 

Expiration

 

1  U.S. Government

 

4,686

 

8.1

%

13.1

%

2008 to 2020

 

2  GlaxoSmithKline plc

 

608

 

1.1

%

1.8

%

2013

 

3  PNC Financial Services Group

 

460

 

0.8

%

1.4

%

2011, 2021

 

4  Jones Day (law firm)

 

407

 

0.7

%

1.4

%

2012, 2019

 

5  Flextronics International Ltd.

 

894

 

1.6

%

1.2

%

2014

 

6  JDA Software Group, Inc.

 

283

 

0.5

%

1.1

%

2012

 

7  ING

 

410

 

0.7

%

1.1

%

2011, 2018

 

8  Ballard Spahr Andrews & Ingersoll, LLP

 

235

 

0.4

%

1.0

%

2008, 2015

 

    Total

 

7,983

 

13.9

%

22.1

%

 

 

 

(1)          Excludes properties classified in discontinued operations.

(2)          Sq. ft. is pursuant to signed leases as of 6/30/2008, and includes (i) space being fitted out for occupancy and (ii) space which is leased, but is not occupied or is being offered for sublease.

(3)          Rental income is rents pursuant to signed leases as of 6/30/2008, plus expense reimbursements; includes some triple net lease rents and excludes lease value amortization.

 

34


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

THREE YEAR LEASE EXPIRATION SCHEDULE BY PROPERTY TYPE (1)

(dollars and sq. ft. in thousands)

 

 

 

Total as of
6/30/2008

 

2008

 

2009

 

2010

 

2011 and
Thereafter

 

 

 

 

 

 

 

 

 

 

 

 

 

Office:

 

 

 

 

 

 

 

 

 

 

 

Total sq. ft.

 

34,326

 

 

 

 

 

 

 

 

 

Leased sq. ft. (2)

 

30,151

 

1,487

 

2,859

 

3,619

 

22,186

 

Percent

 

100.0

%

4.9

%

9.5

%

12.0

%

73.6

%

Annualized rental income (3)

 

$

685,741

 

$

31,874

 

$

62,529

 

$

79,910

 

$

511,428

 

Percent

 

100.0

%

4.6

%

9.1

%

11.7

%

74.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Industrial and Other:

 

 

 

 

 

 

 

 

 

 

 

Total sq. ft.

 

29,112

 

 

 

 

 

 

 

 

 

Leased sq. ft. (2)

 

27,508

 

674

 

591

 

2,802

 

23,441

 

Percent

 

100.0

%

2.5

%

2.1

%

10.2

%

85.2

%

Annualized rental income (3)

 

$

143,690

 

$

5,039

 

$

4,679

 

$

19,753

 

$

114,219

 

Percent

 

100.0

%

3.5

%

3.3

%

13.7

%

79.5

%

 

 

 

 

 

 

 

 

 

 

 

 

CBD:

 

 

 

 

 

 

 

 

 

 

 

Total sq. ft.

 

12,157

 

 

 

 

 

 

 

 

 

Leased sq. ft. (2)

 

10,784

 

579

 

749

 

897

 

8,559

 

Percent

 

100.0

%

5.4

%

6.9

%

8.3

%

79.4

%

Annualized rental income (3)

 

$

299,367

 

$

12,714

 

$

22,375

 

$

26,504

 

$

237,774

 

Percent

 

100.0

%

4.2

%

7.5

%

8.9

%

79.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Suburban:

 

 

 

 

 

 

 

 

 

 

 

Total sq. ft.

 

51,281

 

 

 

 

 

 

 

 

 

Leased sq. ft. (2)

 

46,875

 

1,582

 

2,701

 

5,524

 

37,068

 

Percent

 

100.0

%

3.4

%

5.8

%

11.8

%

79.0

%

Annualized rental income (3)

 

$

530,064

 

$

24,199

 

$

44,833

 

$

73,159

 

$

387,873

 

Percent

 

100.0

%

4.6

%

8.5

%

13.8

%

73.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Total:

 

 

 

 

 

 

 

 

 

 

 

Total sq. ft.

 

63,438

 

 

 

 

 

 

 

 

 

Leased sq. ft. (2)

 

57,659

 

2,161

 

3,450

 

6,421

 

45,627

 

Percent

 

100.0

%

3.7

%

6.0

%

11.1

%

79.2

%

Annualized rental income (3)

 

$

829,431

 

$

36,913

 

$

67,208

 

$

99,663

 

$

625,647

 

Percent

 

100.0

%

4.5

%

8.1

%

12.0

%

75.4

%

 

(1)          Excludes properties classified in discontinued operations.

(2)          Sq. ft. is pursuant to signed leases as of 6/30/2008, and includes (i) space being fitted out for occupancy and (ii) space which is leased, but is not occupied or is being offered for sublease.

(3)          Annualized rental income is rents pursuant to signed leases as of 6/30/2008, plus expense reimbursements; includes some triple net lease rents and excludes lease value amortization.

 

35


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

THREE YEAR LEASE EXPIRATION SCHEDULE BY MAJOR MARKET (1)

(dollars and sq. ft. in thousands)

 

 

 

Total as of
6/30/2008

 

2008

 

2009

 

2010

 

2011 and
Thereafter

 

Metro Philadelphia, PA:

 

 

 

 

 

 

 

 

 

 

 

Total sq. ft.

 

5,274

 

 

 

 

 

 

 

 

 

Leased sq. ft. (2)

 

4,602

 

187

 

274

 

324

 

3,817

 

Percent

 

100.0

%

4.1

%

6.0

%

7.0

%

82.9

%

Annualized rental income (3)

 

$

122,008

 

$

4,863

 

$

6,148

 

$

8,041

 

$

102,956

 

Percent

 

100.0

%

4.0

%

5.0

%

6.6

%

84.4

%

Oahu, HI:

 

 

 

 

 

 

 

 

 

 

 

Total sq. ft.

 

17,914

 

 

 

 

 

 

 

 

 

Leased sq. ft. (2)

 

17,059

 

470

 

264

 

308

 

16,017

 

Percent

 

100.0

%

2.8

%

1.5

%

1.8

%

93.9

%

Annualized rental income (3)

 

$

66,860

 

$

3,054

 

$

1,054

 

$

1,504

 

$

61,248

 

Percent

 

100.0

%

4.6

%

1.6

%

2.2

%

91.6

%

Metro Washington, DC:

 

 

 

 

 

 

 

 

 

 

 

Total sq. ft.

 

2,401

 

 

 

 

 

 

 

 

 

Leased sq. ft. (2)

 

2,210

 

14

 

97

 

229

 

1,870

 

Percent

 

100.0

%

0.6

%

4.4

%

10.4

%

84.6

%

Annualized rental income (3)

 

$

71,044

 

$

516

 

$

3,650

 

$

7,540

 

$

59,338

 

Percent

 

100.0

%

0.7

%

5.1

%

10.6

%

83.6

%

Metro Boston, MA:

 

 

 

 

 

 

 

 

 

 

 

Total sq. ft.

 

2,599

 

 

 

 

 

 

 

 

 

Leased sq. ft. (2)

 

2,202

 

99

 

32

 

84

 

1,987

 

Percent

 

100.0

%

4.5

%

1.5

%

3.8

%

90.2

%

Annualized rental income (3)

 

$

51,362

 

$

3,085

 

$

1,035

 

$

2,571

 

$

44,671

 

Percent

 

100.0

%

6.0

%

2.0

%

5.0

%

87.0

%

Southern California:

 

 

 

 

 

 

 

 

 

 

 

Total sq. ft.

 

1,174

 

 

 

 

 

 

 

 

 

Leased sq. ft. (2)

 

1,044

 

65

 

170

 

86

 

723

 

Percent

 

100.0

%

6.2

%

16.3

%

8.2

%

69.3

%

Annualized rental income (3)

 

$

38,152

 

$

1,950

 

$

7,068

 

$

4,560

 

$

24,574

 

Percent

 

100.0

%

5.1

%

18.5

%

12.0

%

64.4

%

Metro Austin, TX:

 

 

 

 

 

 

 

 

 

 

 

Total sq. ft.

 

2,579

 

 

 

 

 

 

 

 

 

Leased sq. ft. (2)

 

2,311

 

83

 

152

 

477

 

1,599

 

Percent

 

100.0

%

3.6

%

6.6

%

20.6

%

69.2

%

Annualized rental income (3)

 

$

40,285

 

$

1,970

 

$

2,905

 

$

9,127

 

$

26,283

 

Percent

 

100.0

%

4.9

%

7.2

%

22.7

%

65.2

%

Other markets:

 

 

 

 

 

 

 

 

 

 

 

Total sq. ft.

 

31,497

 

 

 

 

 

 

 

 

 

Leased sq. ft. (2)

 

28,231

 

1,243

 

2,461

 

4,913

 

19,614

 

Percent

 

100.0

%

4.4

%

8.7

%

17.4

%

69.5

%

Annualized rental income (3)

 

$

439,720

 

$

21,475

 

$

45,348

 

$

66,320

 

$

306,577

 

Percent

 

100.0

%

4.9

%

10.3

%

15.1

%

69.7

%

Total:

 

 

 

 

 

 

 

 

 

 

 

Total sq. ft.

 

63,438

 

 

 

 

 

 

 

 

 

Leased sq. ft. (2)

 

57,659

 

2,161

 

3,450

 

6,421

 

45,627

 

Percent

 

100.0

%

3.7

%

6.0

%

11.1

%

79.2

%

Annualized rental income (3)

 

$

829,431

 

$

36,913

 

$

67,208

 

$

99,663

 

$

625,647

 

Percent

 

100.0

%

4.5

%

8.1

%

12.0

%

75.4

%

 

(1)          Excludes properties classified in discontinued operations.

(2)          Sq. ft. is pursuant to signed leases as of 6/30/2008, and includes (i) space being fitted out for occupancy and (ii) space which is leased, but is not occupied or is being offered for sublease.

(3)          Annualized rental income is rents pursuant to signed leases as of 6/30/2008, plus expense reimbursements; includes some triple net lease rents and excludes lease value amortization.

 

We define our major markets as markets which currently, or during either of the last two quarters, constitute 5% or more of our leaseable square feet, rental income or NOI.  Major markets are based on geographic market areas as defined by CoStar, except for the Metro Philadelphia, PA market which excludes Wilmington, DE.  Southern California includes properties located in the Los Angeles, San Diego and Orange County markets, as defined by CoStar.  Oahu, HI includes all properties located on the island of Oahu.

 

36


 

HRPT Properties Trust

Supplemental Operating and Financial Data

June 30, 2008

 

PORTFOLIO LEASE EXPIRATION SCHEDULE (1)

(dollars and sq. ft. in thousands)

 

 

 

 

Sq. Ft.
Expiring (2)

 

% of Sq. Ft
Expiring

 

Cumulative %
of Sq. Ft.
Expiring

 

Annualized
Rental Income
Expiring (3)

 

% of Annualized
Rental Income
Expiring

 

Cumulative %
of Annualized
Rental Income
Expiring

 

2008

 

2,161

 

3.7

%

3.7

%

$

36,913

 

4.5

%

4.5

%

2009

 

3,450

 

6.0

%

9.7

%

67,208

 

8.1

%

12.6

%

2010

 

6,421

 

11.1

%

20.8

%

99,663

 

12.0

%

24.6

%

2011

 

5,663

 

9.8

%

30.6

%

98,900

 

11.9

%

36.5

%

2012

 

5,172

 

9.0

%

39.6

%

102,860

 

12.4

%

48.9

%

2013

 

4,558

 

7.9

%

47.5

%

78,777

 

9.5

%

58.4

%

2014

 

2,890

 

5.0

%

52.5

%

49,393

 

6.0

%

64.4

%

2015

 

3,546

 

6.2

%

58.7

%

65,197

 

7.9

%

72.3

%

2016

 

2,717

 

4.7

%

63.4

%

44,099

 

5.3

%

77.6

%

2017

 

1,834

 

3.2

%

66.6

%

37,584

 

4.5

%

82.1

%

2018 and thereafter

 

19,247

 

33.4

%

100.0

%

148,837

 

17.9

%

100.0

%

Total

 

57,659

 

100.0

%

 

 

$

829,431

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average remaining lease term (in years)

 

8.7

 

 

 

 

 

6.1

 

 

 

 

 

 

(1)          Excludes properties classified in discontinued operations.

(2)          Sq. ft. is pursuant to signed leases as of 6/30/2008, and includes (i) space being fitted out for occupancy and (ii) space which is leased, but is not occupied or is being offered for sublease.

(3)          Annualized rental income is rents pursuant to signed leases as of 6/30/2008, plus expense reimbursements; includes some triple net lease rents and excludes lease value amortization.

 

37

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