• |
The same property portfolio was 83.1% leased as of June 30, 2021, compared to 85.6% as of March 31, 2021, and 90.1% as of June 30, 2020.
|
• |
The same property portfolio commenced occupancy was 79.6% as of June 30, 2021, compared to 82.2% as of March 31, 2021, and 83.9 % as of June 30, 2020.
|
• |
Same property NOI decreased 1.9% when compared to the same period in 2020.
|
• |
Same property cash NOI decreased 12.8% when compared to the same period in 2020.
|
• |
The company entered into leases for approximately 29,000 square feet, including renewal leases for approximately 21,000 square feet and new leases for approximately 8,000 square feet.
|
• |
The GAAP rental rate on renewal leases was 20.3% higher compared to the prior GAAP rental rate for the same space.
|
• |
The Cash rental rate on renewal leases was 13.2% higher compared to the prior cash rental rate for the same space.
|
June 30, 2021
|
December 31, 2020
|
|
ASSETS
|
||
Real estate properties:
|
$ 44,060
|
$ 44,060
|
Land | 361,592 | 357,650 |
Buildings and improvements | 405,652 | 401,710 |
Accumulated depreciation | (150,754) | (143,319) |
254,898
|
258,391
|
|
Cash and cash equivalents
|
2,965,788
|
2,987,225
|
Rents receivable
|
15,310
|
14,702
|
Other assets, net
|
20,272
|
17,353
|
Total assets
|
$ 3,256,268
|
$ 3,277,671
|
LIABILITIES AND EQUITY
|
||
Accounts payable, accrued expenses and other
|
$ 19,209
|
$ 20,588
|
Rent collected in advance
|
2,373
|
2,928
|
Distributions payable
|
2,850
|
10,991
|
Total liabilities
|
$ 24,432
|
$ 34,507
|
Shareholders’ equity:
|
||
Preferred shares of beneficial interest, $0.01 par value: 50,000,000 shares authorized;
|
||
Series D preferred shares; 6.50% cumulative convertible; 4,915,196 shares issued and outstanding, aggregate liquidation
preference of $122,880
|
$ 119,263
|
$ 119,263
|
Common shares of beneficial interest, $0.01 par value: 350,000,000 shares authorized; 121,940,355 and 121,522,555 shares issued
and outstanding, respectively
|
1,219
|
1,215
|
Additional paid in capital
|
4,297,197
|
4,294,632
|
Cumulative net income
|
3,802,994
|
3,814,948
|
Cumulative common distributions
|
(4,281,670)
|
(4,283,668)
|
Cumulative preferred distributions
|
(713,706)
|
(709,712)
|
Total shareholders’ equity
|
3,225,297
|
3,236,678
|
Noncontrolling interest
|
6,539
|
6,486
|
Total equity
|
$ 3,231,836
|
$ 3,243,164
|
Total liabilities and equity
|
$ 3,256,268
|
$ 3,277,671
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||
2021
|
2020
|
2021
|
2020
|
|
Revenues:
|
||||
Rental revenue
|
$ 14,114
|
$ 15,248
|
$ 28,283
|
$ 32,391
|
Other revenue (1)
|
761
|
1,017
|
1,443
|
2,694
|
Total revenues
|
$ 14,875
|
$ 16,265
|
$ 29,726
|
$ 35,085
|
Expenses:
|
||||
Operating expenses
|
$ 6,588
|
$ 6,677
|
$ 13,209
|
$ 15,438
|
Depreciation and amortization
|
4,432
|
4,398
|
8,783
|
9,512
|
General and administrative
|
7,390
|
8,302
|
23,119
|
18,906
|
Total expenses
|
$ 18,410
|
$ 19,377
|
$ 45,111
|
$ 43,856
|
Interest and other income, net
|
1,626
|
4,443
|
3,469
|
16,338
|
Interest expense (including net amortization of debt premiums and deferred financing fees of $—, $(60), $—, and $(116), respectively)
|
—
|
(302)
|
—
|
(611)
|
Gain on sale of properties, net
|
—
|
26,916
|
—
|
446,536
|
(Loss) income before income taxes
|
(1,909)
|
27,945
|
(11,916)
|
453,492
|
Income tax expense
|
(31)
|
(59)
|
(62)
|
(99)
|
Net (loss) income
|
$ (1,940)
|
$ 27,886
|
$ (11,978)
|
$ 453,393
|
Net loss (income) attributable to noncontrolling interest
|
4
|
(54)
|
24
|
(802)
|
Net (loss) income attributable to Equity Commonwealth
|
$ (1,936)
|
$ 27,832
|
$ (11,954)
|
$ 452,591
|
Preferred distributions
|
(1,997)
|
(1,997)
|
(3,994)
|
(3,994)
|
Net (loss) income attributable to Equity Commonwealth common shareholders
|
$ (3,933)
|
$ 25,835
|
$ (15,948)
|
$ 448,597
|
Weighted average common shares outstanding — basic (2)
|
122,189
|
121,655
|
122,096
|
121,901
|
Weighted average common shares outstanding — diluted(2)(3)
|
122,189
|
123,255
|
122,096
|
126,358
|
Earnings per common share attributable to Equity Commonwealth common shareholders:
|
||||
Basic
|
$ (0.03)
|
$ 0.21
|
$ (0.13)
|
$ 3.68
|
Diluted
|
$ (0.03)
|
$ 0.21
|
$ (0.13)
|
$ 3.58
|
(1) |
Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.
|
(2) |
Weighted average common shares outstanding for the three months ended June 30, 2021 and 2020 includes 266 and 150 unvested, earned RSUs, respectively. Weighted average common shares outstanding
for the six months ended June 30, 2021 and 2020 includes 251 and 164 unvested, earned RSUs, respectively.
|
(3) |
As of June 30, 2021, we had 4,915 series D preferred shares outstanding. The series D preferred shares were convertible into 3,237 common shares as of June 30, 2021 and 2,857 common shares as of
June 30, 2020. The series D preferred shares are antidilutive for GAAP EPS for the three and six months ended June 30, 2021 and for the three months ended June 30, 2020. They are dilutive for GAAP EPS for the six months ended June 30, 2020.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||
2021
|
2020
|
2021
|
2020
|
|
Calculation of FFO
|
||||
Net (loss) income
|
$ (1,940)
|
$ 27,886
|
$ (11,978)
|
$ 453,393
|
Real estate depreciation and amortization
|
4,385
|
4,174
|
8,686
|
9,055
|
Gain on sale of properties, net
|
—
|
(26,916)
|
—
|
(446,536)
|
FFO attributable to Equity Commonwealth
|
2,445
|
5,144
|
(3,292)
|
15,912
|
Preferred distributions
|
(1,997)
|
(1,997)
|
(3,994)
|
(3,994)
|
FFO attributable to EQC common shareholders and unitholders
|
$ 448
|
$ 3,147
|
$ (7,286)
|
$ 11,918
|
Calculation of Normalized FFO
|
||||
FFO attributable to EQC common shareholders and unitholders
|
$ 448
|
$ 3,147
|
$ (7,286)
|
$ 11,918
|
Straight-line rent adjustments
|
(561)
|
515
|
(868)
|
713
|
Executive severance expense
|
— | — | 7,107 | — |
Taxes related to property sales included in general and administrative
|
— | 10 |
— |
1,458 |
Taxes related to property sales, net included in income tax expense
|
— | 44 | — | 79 |
Normalized FFO attributable to EQC common shareholders and unitholders
|
$ (113)
|
$ 3,716
|
$ (1,047)
|
$ 14,168
|
Weighted average common shares and units outstanding — basic FFO (1)
|
122,433
|
121,889
|
122,340
|
122,100
|
Weighted average common shares and units outstanding — diluted FFO (1)
|
122,935
|
123,489
|
122,340
|
123,700
|
Weighted average common shares and units outstanding — basic Normalized FFO (1)
|
122,433
|
121,889
|
122,340
|
122,100
|
Weighted average common shares and units outstanding — diluted Normalized FFO (1)
|
122,433
|
123,489
|
122,340
|
123,700
|
FFO attributable to EQC common shareholders and unitholders per share and unit — basic and diluted
|
$ 0.00
|
$ 0.03
|
$ (0.06)
|
$ 0.10
|
Normalized FFO attributable to EQC common shareholders and unitholders per share and unit — basic
|
$ (0.00)
|
$ 0.03
|
$ (0.01)
|
$ 0.12
|
Normalized FFO attributable to EQC common shareholders and unitholders per share and unit — diluted
|
$ (0.00)
|
$ 0.03
|
$ (0.01)
|
$ 0.11
|
For the Three Months Ended
|
|||||
6/30/2021
|
3/31/2021
|
12/31/2020
|
9/30/2020
|
6/30/2020
|
|
Calculation of Same Property NOI and Same Property Cash Basis NOI:
|
|||||
Rental revenue
|
$ 14,114
|
$ 14,169
|
$ 14,001
|
$ 15,742
|
$ 15,248
|
Other revenue (1) | 761 | 682 | 707 | 743 | 1,017 |
Operating expenses | (6,588) | (6,621) | (6,976) | (6,444) | (6,677) |
NOI
|
$ 8,287
|
$ 8,230
|
$ 7,732
|
$ 10,041
|
$ 9,588
|
Straight-line rent adjustments
|
(561)
|
(307)
|
(6)
|
(367)
|
515
|
Lease termination fees | — | — |
(10) | (1,300) | — |
Cash Basis NOI
|
$ 7,726
|
$ 7,923
|
$ 7,716
|
$ 8,374
|
$ 10,103
|
Cash Basis NOI from non-same properties (2)
|
22
|
(124)
|
(415)
|
(218)
|
(1,221)
|
Same Property Cash Basis NOI
|
$ 7,748
|
$ 7,799
|
$ 7,301
|
$ 8,156
|
$ 8,882
|
Non-cash rental income and lease termination fees from same properties
|
561
|
307
|
16
|
1,668
|
(408)
|
Same Property NOI
|
$ 8,309
|
$ 8,106
|
$ 7,317
|
$ 9,824
|
$ 8,474
|
Reconciliation of Same Property NOI to GAAP Net (Loss) Income:
|
|||||
Same Property NOI
|
$ 8,309
|
$ 8,106
|
$ 7,317
|
$ 9,824
|
$ 8,474
|
Non-cash rental income and lease termination fees from same properties
|
(561)
|
(307)
|
(16)
|
(1,668)
|
408
|
Same Property Cash Basis NOI
|
$ 7,748
|
$ 7,799
|
$ 7,301
|
$ 8,156
|
$ 8,882
|
Cash Basis NOI from non-same properties (2)
|
(22)
|
124
|
415
|
218
|
1,221
|
Cash Basis NOI
|
$ 7,726
|
$ 7,923
|
$ 7,716
|
$ 8,374
|
$ 10,103
|
Straight-line rent adjustments
|
561
|
307
|
6
|
367
|
(515)
|
Lease termination fees | — | — | 10 | 1,300 | — |
NOI
|
$ 8,287
|
$ 8,230
|
$ 7,732
|
$ 10,041
|
$ 9,588
|
Depreciation and amortization
|
(4,432) | (4,351) | (4,680) | (5,137) | (4,398) |
General and administrative
|
(7,390) | (15,729) | (7,136) | (7,191) | (8,302) |
Interest and other income, net
|
1,626 | 1,843 | 2,284 | 2,606 | 4,443 |
Interest expense
|
— | — | — | (9) | (302) |
Gain on early extinguishment of debt
|
— | — | — | 131 | — |
Gain on sale of properties, net
|
— | — | 208 | — | 26,916 |
(Loss) income before income taxes
|
$ (1,909)
|
$ (10,007)
|
$ (1,592)
|
$ 441
|
$ 27,945
|
Income tax expense
|
(31)
|
(31)
|
(78)
|
(71)
|
(59)
|
Net (loss) income
|
$ (1,940)
|
$ (10,038)
|
$ (1,670)
|
$ 370
|
$ 27,886
|
For the Six Months Ended June 30,
|
||||
2021
|
2020
|
|||
Calculation of Same Property NOI and Same Property Cash Basis NOI:
|
||||
Rental revenue | $ | 28,283 | $ | 32,391 |
Other revenue (1) | 1,443 | 2,694 | ||
Operating expenses | (13,209) | (15,438) | ||
NOI
|
$
|
16,517
|
$
|
19,647
|
Straight-line rent adjustments
|
(868)
|
713
|
||
Cash Basis NOI
|
$
|
15,649
|
$
|
20,360
|
Cash Basis NOI from non-same properties (2)
|
(102)
|
(2,620)
|
||
Same Property Cash Basis NOI
|
$
|
15,547
|
$
|
17,740
|
Non-cash rental income and lease termination fees from same properties
|
868
|
(515)
|
||
Same Property NOI
|
$
|
16,415
|
$
|
17,225
|
Reconciliation of Same Property NOI to GAAP Net (Loss) Income:
|
||||
Same Property NOI
|
$
|
16,415
|
$
|
17,225
|
Non-cash rental income and lease termination fees from same properties
|
(868)
|
515
|
||
Same Property Cash Basis NOI
|
$
|
15,547
|
$
|
17,740
|
Cash Basis NOI from non-same properties (2)
|
102
|
2,620
|
||
Cash Basis NOI
|
$
|
15,649
|
$
|
20,360
|
Straight-line rent adjustments
|
868
|
(713)
|
||
NOI
|
$
|
16,517
|
$
|
19,647
|
Depreciation and amortization
|
(8,783)
|
(9,512)
|
||
General and administrative
|
(23,119)
|
(18,906)
|
||
Interest and other income, net
|
3,469
|
16,338
|
||
Interest expense
|
—
|
(611)
|
||
Gain on sale of properties, net
|
—
|
446,536
|
||
(Loss) income before income taxes
|
$
|
(11,916)
|
$
|
453,492
|
Income tax expense
|
(62)
|
(99)
|
||
Net (loss) income
|
$
|
(11,978)
|
$
|
453,393
|
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