EX-99.2

EX-99.2 3 d63808dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

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PSBUSINESSPARKS® psbusinessparks.com I industrial I flex I office I SUPPLEMENTAL INFORMATION SECOND QUARTER 2019 701 WESTERN AVENUE I GLENDALE, CA 91201 I 818.244.8080

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ANALYSIS OF OPERATING RESULTS AND FINANCIAL CONDITION FOR

THE THREE AND SIX MONTHS ENDED JUNE 30, 2019


		Page

Consolidated Balance Sheets		4

Consolidated Statements of Income		6

Portfolio Summary		8

Second Quarter Fact Sheet		9

Same Park Cash NOI and NOI by Region and Type		10

Analysis of Capital Expenditures		14

Funds from Operations (FFO), Core FFO and Funds Available for Distribution (FAD)		15

Capital Structure and Financial Condition		17

Portfolio Operating Analysis and Statistics		18

Lease Expirations		25

Quarter- and Year-to-Date Production Statistics		29

Multifamily Summary		30

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Forward-Looking Statement

When used within this supplemental information package, the words “may,” “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” “intends” and similar expressions are intended to identify “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results and performance of the Company to be materially different from those expressed or implied in the forward-looking statements. Such factors include the impact of competition from new and existing commercial facilities which could impact rents and occupancy levels at the Company’s facilities; the Company’s ability to evaluate, finance and integrate acquired and developed properties into the Company’s existing operations; the Company’s ability to effectively compete in the markets that it does business in; the impact of the regulatory environment as well as national, state and local laws and regulations including, without limitation, those governing REITs; the impact of general economic conditions upon rental rates and occupancy levels at the Company’s facilities; the availability of permanent capital at attractive rates, the outlook and actions of rating agencies and risks detailed from time to time in the Company’s SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K.

Non-GAAP Disclosures

Provided within this supplemental information package are measures not defined in accordance with U.S. generally accepted accounting principles (“GAAP”). We believe our presentation of these non-GAAP measures assists investors and analysts in analyzing and comparing our operating and financial performance between reporting periods. These non-GAAP measures discussed below are not substitutes of other measures of financial performance presented in accordance with GAAP. In addition, other real estate investment trusts (“REITs”) may compute these measures differently, so comparisons among REITs may not be helpful.

Net operating income (“NOI”) – We utilize NOI, a non-GAAP financial measure, to evaluate the operating performance of our business parks. We define NOI as rental income less adjusted cost of operations (described below). We believe NOI assists investors in analyzing the performance and value of our business parks by excluding (i) corporate overhead (i.e. general and administrative expenses) because it does not relate to the results of our business parks, (ii) depreciation and amortization expense because it does not accurately reflect changes in the fair value of our business parks and (iii) stock compensation expense because this expense item can vary significantly from period to period and thus impact comparability across periods. The GAAP measure most directly comparable to NOI is net income.

Cash NOI – We utilized cash NOI to evaluate the cash flow performance of our business parks. Cash NOI represents NOI adjusted to exclude non-cash items included in revenue and in cost of operations. The non-cash items in revenue include straight-line rent, amortization of above and below market rents, net, and amortization of lease incentives and tenant improvement reimbursements. The non-cash items in cost of operations is equal to stock compensation expense for employees whose compensation expense is recorded in cost of operations. We believe that cash NOI assists investors in analyzing cash flow performance of our business parks. The GAAP measure most directly comparable to cash NOI is net income.

Adjusted Cost of Operations – Adjusted cost of operations represents cost of operations, excluding non-cash stock compensation expense for employees whose compensation expense is recorded in cost of operations, which can vary significantly period to period based upon the performance of the company. The GAAP measure most directly comparable to adjusted cost of operations is cost of operations.

Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) – EBITDAre is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and is often utilized to evaluate the performance of real estate companies. EBITDAre is calculated as GAAP net income before interest, depreciation and amortization and adjusted to exclude gains or losses from sales of depreciable real estate assets. We believe our presentation of EBITDAre assists investors and analysts in evaluating the operating performance of our business activities, including the impact of general and administrative expenses, and without the impact from gains or losses from sales of depreciable real estate assets. The GAAP measure most directly comparable EBITDAre is net income.

Funds from Operations (“FFO”) and FFO per share – FFO and FFO per share are non-GAAP measures defined by NAREIT and are considered helpful measures of REIT performance by REITs and many REIT analysts. FFO represents GAAP net income before real estate depreciation and amortization expense, gains or losses on sales of operating properties and land and impairment charges on real estate assets, which are excluded because it does not accurately reflect changes in the value of our business parks. FFO per share represents FFO allocable to common and dilutive shares, divided by aggregate common and dilutive shares. The GAAP measure most directly comparable to FFO and FFO per share are net income and earnings per share, respectively.

Core FFO and Core FFO per share – Core FFO represents FFO excluding the net impact of (i) income allocated to preferred shareholders to the extent redemption value exceeds the related carrying value and (ii) nonrecurring income or expense items. Core FFO per share represents Core FFO allocable to common and dilutive shares divided by the weighted average common and dilutive shares. We believe our presentation of Core FFO and Core FFO per share assists investors and analysts in analyzing and comparing our operating and financial performance between reporting periods. The GAAP measures most directly comparable to Core FFO and Core FFO per share are net income and earnings per share, respectively.

Funds Available for Distribution (“FAD”) – FAD is a non-GAAP measure that represents Core FFO adjusted to (a) deduct recurring capital improvements that maintains the condition of our real estate, tenant improvements and lease commissions and (b) eliminate certain non-cash income or expenses such as straight-line rent and non-cash stock compensation expense. We believe our presentation of FAD assists investors and analysts in analyzing and comparing our operating and financial performance between reporting periods. FAD is not a substitute for GAAP net cash flow in evaluating our liquidity or ability to pay dividends, because they exclude investing and financing activities presented on our statements of cash flows. The GAAP measure most directly comparable to FAD is operating cash flow from our statements of cash flows.

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	June 30, 2019		December 31, 2018
ASSETS

Cash and cash equivalents	$	42,046	$	37,379	(a)

Real estate facilities, at cost
Land		772,399		762,731
Buildings and improvements		2,171,281		2,157,407

		2,943,680		2,920,138
Accumulated depreciation		(1,135,107)		(1,097,748)

		1,808,573		1,822,390	(b)
Properties held for sale, net		124,680		128,093	(c)
Land and building held for development		31,841		30,848

		1,965,094		1,981,331

Rent receivable, net		2,308		1,403	(d)
Deferred rent receivable, net		34,572		33,308
Other assets		13,524		15,173	(e)

Total assets	$	2,057,544	$	2,068,594


LIABILITIES AND EQUITY

Accrued and other liabilities	$	80,367	$	85,141	(f)

Total liabilities		80,367		85,141

Equity
PS Business Parks, Inc.’s shareholders’ equity:
Preferred stock		959,750		959,750
Common stock		274		274
Paid-in capital		733,777		736,131	(g)
Accumulated earnings		67,049		69,207	(h)

Total PS Business Parks, Inc.’s shareholders’ equity		1,760,850		1,765,362
Noncontrolling interests		216,327		218,091

Total equity		1,977,177		1,983,453

Total liabilities and equity	$	2,057,544	$	2,068,594

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(a)	Change in cash and cash equivalents
	Beginning cash balance at December 31, 2018					$	37,379
	Net cash provided by operating activities						141,169
	Net cash used in investing activities						(32,232)
	Net cash used in financing activities						(104,270)

	Ending cash balance at June 30, 2019					$	42,046


(b)	Change in real estate facilities
	Beginning balance at December 31, 2018					$	1,822,390
	Acquisition of real estate						13,646
	Recurring capital improvements						3,608
	Tenant improvements, gross						8,786
	Capitalized lease commissions						3,373
	Nonrecurring capital improvements						1,955
	Depreciation and amortization						(48,598)
	Transfer to properties held for sale						3,413

	Ending balance at June 30, 2019					$	1,808,573


(c)	Change in properties held for sale, net:
	Beginning balance at December 31, 2018					$	128,093
	Recurring capital improvements						642
	Depreciation and amortization						(4,055)

	Ending balance at June 30, 2019					$	124,680


							Increase
(d)	Change in rent receivable	June 30, 2019		December 31, 2018		(Decrease)
	Non-government customers	$	1,593	$	1,040	$	553
	U.S. Government customers		1,115		763		352
	Allowance for doubtful accounts		(400)		(400)		-

		$	2,308	$	1,403	$	905


						Increase
(e)	Change in other assets		June 30, 2019		December 31, 2018		(Decrease)
	Lease intangible assets, net	$	9,052	$	8,671	$	381
	Prepaid property taxes and insurance		723		3,381		(2,658)
	Other		3,749		3,121		628

		$	13,524	$	15,173	$	(1,649)


							Increase
(f)	Change in accrued and other liabilities	June 30, 2019		December 31, 2018		(Decrease)
	Customer security deposits	$	39,722	$	37,557	$	2,165
	Accrued property taxes		13,829		10,454		3,375
	Customer prepaid rent		9,918		16,830		(6,912)
	Lease intangible labilities, net		8,798		7,870		928
	Other		8,100		12,430		(4,330)

		$	80,367	$	85,141	$	(4,774)


(g)	Change in paid-in capital
	Beginning paid-in capital					$	736,131
	Exercise of stock options						709
	Stock compensation expense, net						1,409
	Cash paid for taxes in lieu of shares upon vesting of restricted stock units						(5,500)
	Adjustment to reflect noncontrolling interests underlying ownership - common units						1,028

	Ending paid in capital					$	733,777



(h)	Change in accumulated earnings
	Beginning accumulated earnings					$	69,207
	Net income						81,298
	Distributions to preferred shareholders						(25,918)
	Distributions to common shareholders						(57,538)

	Ending accumulated earnings					$	67,049

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	For The Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2019		2018		2019		2018
Rental income	$	107,782	$	101,824	$	215,607	$	205,583	(a)

Expenses
Cost of operations ⁽¹⁾		31,460		30,796		65,053		63,252	(b)
Depreciation and amortization		24,768		24,416		49,643		48,298
General and administrative ⁽¹⁾		2,827		2,828		6,060		5,678	(c)

Total operating expenses		59,055		58,040		120,756		117,228


Interest and other income		764		294		1,382		578	(d)
Interest and other expense		(118)		(167)		(285)		(332)	(e)
Gain on sale of real estate facilities		-		58,448		-		85,283

Net income		49,373		102,359		95,948		173,884
Allocation to noncontrolling interests		(7,623)		(18,400)		(14,650)		(30,300)

Net income allocable to PS Business Parks, Inc.		41,750		83,959		81,298		143,584
Allocation to preferred shareholders		(12,959)		(12,959)		(25,918)		(25,962)
Allocation to restricted stock unit holders		(212)		(779)		(480)		(1,353)

Net income allocable to common shareholders	$	28,579	$	70,221	$	54,900	$	116,269


Net income per common share
Basic	$	1.04	$	2.57	$	2.00	$	4.26
Diluted	$	1.04	$	2.56	$	2.00	$	4.24

Weighted average common shares outstanding
Basic		27,426		27,322		27,400		27,294
Diluted		27,532		27,423		27,505		27,395

⁽¹⁾

Beginning January 1, 2019, the Company has recorded our divisional vice presidents’ compensation costs within general and administrative expense as we determined that the nature of these individuals’ responsibilities is more consistent with corporate oversight as opposed to direct property operations. As a result of this change, we have reclassified our divisional vice presidents’ compensation costs totaling $460,000 for the three months ended June 30, 2018, consisting of $305,000 of compensation costs and $155,000 of stock compensation expense, and compensation costs totaling $1.0 million for the six months ended June 30, 2018, consisting of $690,000 of compensation costs and $314,000 of stock compensation expense, from cost of operations into general and administrative expenses on our consolidated statements of income in the three and six months ended June 30, 2018 in order to conform to the current periods’ presentation.

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		For The Three Months Ended				Increase		For the Six Months Ended				Increase
(a)	Rental income:	June 30, 2019		June 30, 2018		(Decrease)		June 30, 2019		June 30, 2018		(Decrease)
	Same Park	$	95,385	$	90,989	$	4,396	$	190,429	$	181,648	$	8,781
	Same Park non-cash items ⁽¹⁾		560		953		(393)		1,209		1,972		(763)
	Non-Same Park		3,194		565		2,629		5,511		565		4,946
	Non-Same Park non-cash items ⁽¹⁾		235		62		173		399		62		337
	Multifamily		2,474		1,720		754		4,971		3,144		1,827
	Multifamily non-cash items ⁽¹⁾		1		18		(17)		2		18		(16)
	Revenue from assets sold and held for sale ⁽²⁾		5,933		7,517		(1,584)		13,086		18,174		(5,088)

		$	107,782	$	101,824	$	5,958	$	215,607	$	205,583	$	10,024


		For The Three Months Ended				Increase		For the Six Months Ended				Increase
(b)	Cost of operations:	June 30, 2019		June 30, 2018		(Decrease)		June 30, 2019		June 30, 2018		(Decrease)
	Same Park	$	26,947	$	26,366	$	581	$	55,389	$	53,588	$	1,801
	Same Park non-cash items ⁽³⁾		266		312		(46)		542		647		(105)
	Non-Same Park		1,024		224		800		2,167		224		1,943
	Non-Same Park non-cash items ⁽³⁾		13		-		13		26		-		26
	Multifamily		1,002		973		29		2,073		1,970		103
	Expenses from assets sold and held for sale ⁽²⁾		2,208		2,921		(713)		4,856		6,823		(1,967)

		$	31,460	$	30,796	$	664	$	65,053	$	63,252	$	1,801


		For The Three Months Ended				Increase		For the Six Months Ended				Increase
(c)	General and administrative expenses:	June 30, 2019		June 30, 2018		(Decrease)		June 30, 2019		June 30, 2018		(Decrease)
	Compensation expense	$	1,278	$	1,643	$	(365)	$	2,961	$	2,973	$	(12)
	Stock compensation expense		514		235		279		1,075		872		203
	Professional fees and other		1,035		950		85		2,024		1,833		191

		$	2,827	$	2,828	$	(1)	$	6,060	$	5,678	$	382


		For The Three Months Ended				Increase		For the Six Months Ended				Increase
(d)	Interest and other income:	June 30, 2019		June 30, 2018		(Decrease)		June 30, 2019		June 30, 2018		(Decrease)
	Management fee income	$	72	$	112	$	(40)	$	150	$	238	$	(88)
	Interest income		316		42		274		642		109		533
	Other income		376		140		236		590		231		359

		$	764	$	294	$	470	$	1,382	$	578	$	804


		For The Three Months Ended				Increase		For the Six Months Ended				Increase
(e)	Interest and other expense:	June 30, 2019		June 30, 2018		(Decrease)		June 30, 2019		June 30, 2018		(Decrease)
	Credit facility	$	-	$	(13)	$	(13)	$	-	$	(18)	$	(18)
	Facilities fees & other charges		(118)		(154)		(36)		(285)		(314)		(29)

		$	(118)	$	(167)	$	(49)	$	(285)	$	(332)	$	(47)

⁽¹⁾	Non-cash items in revenue represent straight-line rent, amortization of above and below market rents, net, and amortization of lease incentives and tenant improvement reimbursements.

⁽²⁾

Amounts for the three and six months ended June 30, 2019 reflect the operating results related to 1.3 million square feet of flex and office assets held for sale as of June 30, 2019; amounts shown for the three and six months ended June 30, 2018 reflect the operating results related to 1.3 million square feet of flex and office assets held for sale as of June 30, 2019 as well as operating results related to 899,000 square feet of assets sold in 2018.

⁽³⁾	Non-cash items in cost of operations represent stock compensation expense attributable to employees whose compensation expense is recorded in costs of operations.

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PROPERTY INFORMATION ⁽¹⁾

	For The Three Months Ended June 30,						For the Six Months Ended June 30,
	2019		2018		% Change		2019		2018		% Change
Total Portfolio⁽²⁾
Total rentable square footage at period end		26,940,000		26,866,000		0.3%		26,940,000		26,866,000		0.3%
Weighted average occupancy		93.8%		94.3%		(0.5%)		93.9%		94.4%		(0.5%)
Period end occupancy		94.1%		94.3%		(0.2%)		94.1%		94.3%		(0.2%)
Annualized realized rent per occupied sq. ft.^(3) (5)	$	15.74	$	15.05		4.6%	$	15.64	$	15.04		4.0%
RevPAF^{(4) (5)}	$	14.76	$	14.20		3.9%	$	14.69	$	14.20		3.5%

Same Park Portfolio ⁽⁶⁾
Total rentable square footage at period end		25,809,000		25,809,000		-		25,809,000		25,809,000		-
Weighted average occupancy		94.3%		94.5%		(0.2%)		94.5%		94.5%		-
Period end occupancy		94.5%		95.0%		(0.5%)		94.5%		95.0%		(0.5%)
Annualized realized rent per occupied sq. ft.^(3) (5)	$	15.77	$	15.08		4.6%	$	15.71	$	15.06		4.3%
RevPAF^{(4) (5)}	$	14.87	$	14.25		4.4%	$	14.85	$	14.23		4.4%

Non-Same Park Portfolio ⁽⁷⁾
Total rentable square footage at period end		1,131,000		1,057,000		7.0%		1,131,000		1,057,000		7.0%
Weighted average occupancy		82.0%		76.1%		7.8%		80.4%		76.1%		5.7%
Period end occupancy		83.3%		76.1%		9.5%		83.3%		76.1%		9.5%
Annualized realized rent per occupied sq. ft.⁽³⁾	$	14.97	$	12.35		21.2%		13.52		12.29		10.0%
RevPAF⁽⁴⁾	$	12.28	$	9.39		30.8%		10.87		9.36		16.1%

Multifamily Portfolio
Number of units		395		395		-		395		395		-
Period end occupancy		94.2%		81.8%		15.2%		94.2%		81.8%		15.2%

⁽¹⁾	Excludes 1.3 million rentable square feet of flex and office assets held for sale and 899,000 square feet of assets sold in 2018.

⁽²⁾	Operating metrics from our multifamily asset are excluded from the total portfolio operating metrics.

⁽³⁾	Annualized realized rent per occupied square foot represents the annualized revenue earned per occupied square foot.

⁽⁴⁾	RevPAF represents the annualized revenue earned per total weighted average available square foot.

⁽⁵⁾	Total and Same Park annualized realized rent per occupied square foot and RevPAF include lease buyout income of $780,000 and $122,000 for the three months ended June 30, 2019 and 2018, respectively, and $957,000 and $250,000 for the six months ended June 30, 2019 and 2018, respectively.

⁽⁶⁾	Same Park includes assets acquired prior to January 1, 2017.

⁽⁷⁾	Non-Same Park reflects assets acquired on or subsequent to January 1, 2017.

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NET OPERATING INCOME



	For The Three Months Ended June 30,						For the Six Months Ended June 30,
	2019		2018		% Change		2019		2018		% Change
Rental income
Same Park ⁽¹⁾	$	95,945	$	91,942		4.4%	$	191,638	$	183,620		4.4%
Non-Same Park ⁽²⁾		3,429		627		446.9%		5,910		627		842.6%
Multifamily		2,475		1,738		42.4%		4,973		3,162		57.3%
Assets sold or held for sale		5,933		7,517		(21.1%)		13,086		18,174		(28.0%)

Total rental income		107,782		101,824		5.9%		215,607		205,583		4.9%

Adjusted cost of operations ⁽³⁾
Same Park ⁽¹⁾		26,947		26,366		2.2%		55,389		53,588		3.4%
Non-Same Park ⁽²⁾		1,024		224		357.1%		2,167		224		867.4%
Multifamily		1,002		973		3.0%		2,073		1,970		5.2%
Assets sold or held for sale		2,192		2,899		(24.4%)		4,823		6,763		(28.7%)

Total adjusted cost of operations		31,165		30,462		2.3%		64,452		62,545		3.0%

Net operating income
Same Park ⁽¹⁾		68,998		65,576		5.2%		136,249		130,032		4.8%
Non-Same Park ⁽²⁾		2,405		403		496.8%		3,743		403		828.8%
Multifamily		1,473		765		92.5%		2,900		1,192		143.3%
Assets sold or held for sale ⁽⁴⁾		3,741		4,618		(19.0%)		8,263		11,411		(27.6%)

Total net operating income	$	76,617	$	71,362		7.4%	$	151,155	$	143,038		5.7%


CASH NET OPERATING INCOME

	For The Three Months Ended June 30,						For the Six Months Ended June 30,
	2019		2018		% Change		2019		2018		% Change
Cash rental income ⁽⁵⁾
Same Park ⁽¹⁾	$	95,385	$	90,989		4.8%	$	190,429	$	181,648		4.8%
Non-Same Park ⁽²⁾		3,194		565		465.3%		5,511		565		875.4%
Multifamily		2,474		1,720		43.8%		4,971		3,144		58.1%
Assets sold or held for sale		5,797		7,321		(20.8%)		12,749		17,753		(28.2%)

Total cash rental income		106,850		100,595		6.2%		213,660		203,110		5.2%

Adjusted cost of operations ⁽³⁾
Same Park ⁽¹⁾		26,947		26,366		2.2%		55,389		53,588		3.4%
Non-Same Park ⁽²⁾		1,024		224		357.1%		2,167		224		867.4%
Multifamily		1,002		973		3.0%		2,073		1,970		5.2%
Assets sold or held for sale		2,192		2,899		(24.4%)		4,823		6,763		(28.7%)

Total adjusted cost of operations		31,165		30,462		2.3%		64,452		62,545		3.0%

Cash net operating income
Same Park ⁽¹⁾		68,438		64,623		5.9%		135,040		128,060		5.5%
Non-Same Park ⁽²⁾		2,170		341		536.4%		3,344		341		880.6%
Multifamily		1,472		747		97.1%		2,898		1,174		146.8%
Assets sold or held for sale ⁽⁴⁾		3,605		4,422		(18.5%)		7,926		10,990		(27.9%)

Total cash net operating income	$	75,685	$	70,133		7.9%	$	149,208	$	140,565		6.1%


EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre)

	For The Three Months Ended June 30,						For the Six Months Ended June 30,
	2019		2018		% Change		2019		2018		% Change
Net income	$	49,373	$	102,359		(51.8%)	$	95,948	$	173,884		(44.8%)
Net interest (income) expense		(180)		98		(283.7%)		(370)		171		(316.4%)
Depreciation and amortization		24,768		24,416		1.4%		49,643		48,298		2.8%
Gain on sale of real estate facilities and development rights		-		(58,448)		(100.0%)		-		(85,283)		(100.0%)

EBITDAre	$	73,961	$	68,425		8.1%	$	145,221	$	137,070		5.9%

⁽¹⁾

Same Park includes assets acquired prior to January 1, 2017. Same Park rental income and cash rental income include lease buyout income of $780,000 and $122,000 for the three months ended June 30, 2019 and 2018, respectively, and $957,000 and $250,000 for the six months ended June 30, 2019 and 2018, respectively.

⁽²⁾	Non-Same Park reflects assets acquired on or subsequent to January 1, 2017.

⁽³⁾

Adjusted cost of operations represents cost of operations excluding non-cash stock compensation expense for employees whose compensation expense is recorded in cost of operations. Refer to the “Forward-Looking Statement and Non-GAAP Disclosures” on page 3 for more information. Beginning January 1, 2019, the Company has recorded our divisional vice presidents’ compensation costs within general and administrative expense as we determined that the nature of these individuals’ responsibilities is more consistent with corporate oversight as opposed to direct property operations. As a result of this change, we have reclassified divisional vice presidents’ compensation costs totaling $305,000 and $690,000 for the three and six months ended June 30, 2018, respectively, from adjusted cost of operations into general and administrative expenses in order to conform to the current periods’ presentation. Non-cash compensation expense for our divisional vice presidents, which totaled $155,000 and $314,000 for the three and six months ended June 30, 2018, respectively, had previously been excluded from adjusted cost of operations.

⁽⁴⁾

NOI from assets held for sale was $3.7 million and $4.2 million for the three months ended June 30, 2019 and 2018, respectively, and $8.3 million and $8.5 million for the six months ended June 30, 2019 and 2018, respectively. Cash NOI from assets held for sale was $3.6 million and $4.0 million for the three months ended June 30, 2019 and 2018, respectively, and $7.9 million and $8.2 million for the six months ended June 30, 2019 and 2018, respectively. The three and six months 2018 remaining NOI balances relate to assets sold during 2018.

⁽⁵⁾	Cash rental income excludes non-cash items, specifically straight-line rent, amortization of above and below market rents, net, amortization of lease incentives and tenant improvement reimbursements.

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	For the Three Months Ended
	June 30, 2019								June 30, 2018
	Industrial		Flex		Office		Total		Industrial		Flex		Office		Total
Cash rental income ⁽¹⁾
Northern California	$	21,281	$	2,428	$	2,966	$	26,675	$	19,463	$	2,369	$	2,782	$	24,614
Southern California		8,693		4,648		185		13,526		8,624		4,489		150		13,263
Dallas		3,146		5,442		—		8,588		2,833		4,528		—		7,361
Austin		2,120		5,589		—		7,709		1,997		5,816		—		7,813
Northern Virginia		1,751		6,202		10,237		18,190		1,695		6,250		9,794		17,739
South Florida		10,167		470		26		10,663		9,785		515		41		10,341
Suburban Maryland		1,105		—		4,513		5,618		1,115		—		4,462		5,577
Seattle		2,706		1,528		182		4,416		2,636		1,461		184		4,281

Total		50,969		26,307		18,109		95,385		48,148		25,428		17,413		90,989

Adjusted cost of operations ⁽²⁾
Northern California		4,377		631		778		5,786		4,215		613		717		5,545
Southern California		2,210		1,204		77		3,491		2,146		1,127		64		3,337
Dallas		950		1,976		—		2,926		921		1,932		—		2,853
Austin		722		2,164		—		2,886		683		2,099		—		2,782
Northern Virginia		462		1,701		3,741		5,904		501		1,815		3,722		6,038
South Florida		2,819		146		37		3,002		2,606		131		15		2,752
Suburban Maryland		319		—		1,566		1,885		339		—		1,613		1,952
Seattle		628		389		50		1,067		676		372		59		1,107

Total		12,487		8,211		6,249		26,947		12,087		8,089		6,190		26,366

Cash NOI
Northern California		16,904		1,797		2,188		20,889		15,248		1,756		2,065		19,069
Southern California		6,483		3,444		108		10,035		6,478		3,362		86		9,926
Dallas		2,196		3,466		—		5,662		1,912		2,596		—		4,508
Austin		1,398		3,425		—		4,823		1,314		3,717		—		5,031
Northern Virginia		1,289		4,501		6,496		12,286		1,194		4,435		6,072		11,701
South Florida		7,348		324		(11)		7,661		7,179		384		26		7,589
Suburban Maryland		786		—		2,947		3,733		776		—		2,849		3,625
Seattle		2,078		1,139		132		3,349		1,960		1,089		125		3,174

Total	$	38,482	$	18,096	$	11,860	$	68,438	$	36,061	$	17,339	$	11,223	$	64,623

⁽¹⁾

Cash rental income excludes non-cash items, specifically straight-line rent, amortization of above and below market rents, net, amortization of lease incentives and tenant improvement reimbursements. Cash rental income includes lease buyout income of $780,000 and $122,000 for the three months ended June 30, 2019 and 2018, respectively.

⁽²⁾

Adjusted cost of operations represents cost of operations excluding non-cash stock compensation expense related to employees whose compensation expense is included in costs of operations. Refer to the “Forward-Looking Statement and Non-GAAP Disclosures” on page 3 for more information. Beginning January 1, 2019, the Company has recorded our divisional vice presidents’ compensation costs within general and administrative expense as we determined that the nature of these individuals’ responsibilities is more consistent with corporate oversight as opposed to direct property operations. As a result of this change, we have reclassified divisional vice presidents’ compensation costs totaling $289,000 for the three months ended June 30, 2018 from adjusted cost of operations into general and administrative expenses in order to conform to the current periods’ presentation. Non-cash compensation expense for our divisional vice presidents, which totaled $149,000 for the three months ended June 30, 2018 had previously been excluded from adjusted cost of operations.

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	For the Six Months Ended
	June 30, 2019									June 30, 2018
	Industrial		Flex		Office			Total		Industrial		Flex		Office		Total
Cash rental income ⁽¹⁾
Northern California	$	41,833	$	4,895	$	5,958		$	52,686	$	38,507	$	4,712	$	5,540	$	48,759
Southern California		17,484		9,286		368			27,138		16,945		8,905		335		26,185
Dallas		6,196		10,572		—			16,768		5,643		9,358		—		15,001
Austin		4,181		10,997		—			15,178		3,981		11,248		—		15,229
Northern Virginia		3,544		12,528		20,819			36,891		3,452		12,497		20,090		36,039
South Florida		20,610		926		26			21,562		19,725		1,016		86		20,827
Suburban Maryland		2,302		—		9,048			11,350		2,256		—		8,802		11,058
Seattle		5,363		3,130		363			8,856		5,271		2,915		364		8,550

Total		101,513		52,334		36,582			190,429		95,780		50,651		35,217		181,648

Adjusted cost of operations ⁽²⁾
Northern California		8,972		1,310		1,548			11,830		8,525		1,261		1,450		11,236
Southern California		4,437		2,455		145			7,037		4,143		2,283		129		6,555
Dallas		1,897		3,941		—			5,838		1,890		3,716		—		5,606
Austin		1,440		4,170		—			5,610		1,339		4,002		—		5,341
Northern Virginia		1,079		3,727		8,180			12,986		1,065		3,792		8,112		12,969
South Florida		5,530		296		59			5,885		5,346		258		25		5,629
Suburban Maryland		700		—		3,401			4,101		707		—		3,375		4,082
Seattle		1,247		756		99			2,102		1,337		722		111		2,170

Total		25,302		16,655		13,432			55,389		24,352		16,034		13,202		53,588

Cash NOI
Northern California		32,861		3,585		4,410			40,856		29,982		3,451		4,090		37,523
Southern California		13,047		6,831		223			20,101		12,802		6,622		206		19,630
Dallas		4,299		6,631		—			10,930		3,753		5,642		—		9,395
Austin		2,741		6,827		—			9,568		2,642		7,246		—		9,888
Northern Virginia		2,465		8,801		12,639			23,905		2,387		8,705		11,978		23,070
South Florida		15,080		630		(33	)		15,677		14,379		758		61		15,198
Suburban Maryland		1,602		—		5,647			7,249		1,549		—		5,427		6,976
Seattle		4,116		2,374		264			6,754		3,934		2,193		253		6,380

Total	$	76,211	$	35,679	$	23,150		$	135,040	$	71,428	$	34,617	$	22,015	$	128,060

⁽¹⁾

Cash rental income excludes non-cash items, specifically straight-line rent, amortization of above and below market rents, net, amortization of lease incentives and tenant improvement reimbursements. Cash rental income includes lease buyout income of $957,000 and $250,000 for the six months ended June 30, 2019 and 2018, respectively.

⁽²⁾

Adjusted cost of operations represents cost of operations excluding non-cash stock compensation expense related to employees whose compensation expense is included in costs of operations. Refer to the “Forward-Looking Statement and Non-GAAP Disclosures” on page 3 for more information. Beginning January 1, 2019, the Company has recorded our divisional vice presidents’ compensation costs within general and administrative expense as we determined that the nature of these individuals’ responsibilities is more consistent with corporate oversight as opposed to direct property operations. As a result of this change, we have reclassified divisional vice presidents’ compensation costs totaling $655,000 for the six months ended June 30, 2018 from adjusted cost of operations into general and administrative expenses in order to conform to the current periods’ presentation. Non-cash compensation expense for our divisional vice presidents, which totaled $302,000 for the six months ended June 30, 2018 had previously been excluded from adjusted cost of operations.

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	For the Three Months Ended
	June 30, 2019								June 30, 2018
	Industrial		Flex		Office		Total		Industrial		Flex		Office		Total
Rental income ⁽¹⁾
Northern California	$	21,421	$	2,402	$	2,960	$	26,783	$	19,610	$	2,364	$	2,812	$	24,786
Southern California		8,713		4,641		188		13,542		8,525		4,503		150		13,178
Dallas		3,219		5,462		—		8,681		2,892		4,585		—		7,477
Austin		2,110		5,676		—		7,786		1,989		5,820		—		7,809
Northern Virginia		1,833		5,961		10,472		18,266		1,826		6,214		10,269		18,309
South Florida		10,219		465		41		10,725		9,921		492		41		10,454
Suburban Maryland		1,080		—		4,683		5,763		1,118		—		4,567		5,685
Seattle		2,690		1,528		181		4,399		2,600		1,458		186		4,244

Total		51,285		26,135		18,525		95,945		48,481		25,436		18,025		91,942

Adjusted cost of operations ⁽²⁾
Northern California		4,377		631		778		5,786		4,215		613		717		5,545
Southern California		2,210		1,204		77		3,491		2,146		1,127		64		3,337
Dallas		950		1,976		—		2,926		921		1,932		—		2,853
Austin		722		2,164		—		2,886		683		2,099		—		2,782
Northern Virginia		462		1,701		3,741		5,904		501		1,815		3,722		6,038
South Florida		2,819		146		37		3,002		2,606		131		15		2,752
Suburban Maryland		319		—		1,566		1,885		339		—		1,613		1,952
Seattle		628		389		50		1,067		676		372		59		1,107

Total		12,487		8,211		6,249		26,947		12,087		8,089		6,190		26,366

NOI
Northern California		17,044		1,771		2,182		20,997		15,395		1,751		2,095		19,241
Southern California		6,503		3,437		111		10,051		6,379		3,376		86		9,841
Dallas		2,269		3,486		—		5,755		1,971		2,653		—		4,624
Austin		1,388		3,512		—		4,900		1,306		3,721		—		5,027
Northern Virginia		1,371		4,260		6,731		12,362		1,325		4,399		6,547		12,271
South Florida		7,400		319		4		7,723		7,315		361		26		7,702
Suburban Maryland		761		—		3,117		3,878		779		—		2,954		3,733
Seattle		2,062		1,139		131		3,332		1,924		1,086		127		3,137

Total	$	38,798	$	17,924	$	12,276	$	68,998	$	36,394	$	17,347	$	11,835	$	65,576

⁽¹⁾	Rental income includes lease buyout income of $780,000 and $122,000 for the three months ended June 30, 2019 and 2018, respectively.

⁽²⁾

Adjusted cost of operations represents cost of operations excluding non-cash stock compensation expense related to employees whose compensation expense is included in cost of operations. Refer to the “Forward-Looking Statement and Non-GAAP Disclosures” on page 3 for more information. Beginning January 1, 2019, the Company has recorded our divisional vice presidents’ compensation costs within general and administrative expense as we determined that the nature of these individuals’ responsibilities is more consistent with corporate oversight as opposed to direct property operations. As a result of this change, we have reclassified divisional vice presidents’ compensation costs totaling $289,000 for the three months ended June 30, 2018 from adjusted cost of operations into general and administrative expenses in order to conform to the current periods’ presentation. Non-cash compensation expense for our divisional vice presidents, which totaled $149,000 for the three months ended June 30, 2018 had previously been excluded from adjusted cost of operations.

LOGO


	For the Six Months Ended
	June 30, 2019								June 30, 2018
	Industrial		Flex		Office		Total		Industrial		Flex		Office		Total
Rental income ⁽¹⁾
Northern California	$	42,043	$	4,849	$	5,947	$	52,839	$	38,698	$	4,706	$	5,617	$	49,021
Southern California		17,481		9,296		372		27,149		16,921		8,904		333		26,158
Dallas		6,313		10,688		—		17,001		5,748		9,479		—		15,227
Austin		4,218		11,196		—		15,414		3,968		11,277		—		15,245
Northern Virginia		3,725		12,127		21,280		37,132		3,686		12,481		21,022		37,189
South Florida		20,622		931		63		21,616		19,975		970		86		21,031
Suburban Maryland		2,250		—		9,444		11,694		2,258		—		9,012		11,270
Seattle		5,293		3,140		360		8,793		5,199		2,914		366		8,479

Total		101,945		52,227		37,466		191,638		96,453		50,731		36,436		183,620

Adjusted cost of operations ⁽²⁾
Northern California		8,972		1,310		1,548		11,830		8,525		1,261		1,450		11,236
Southern California		4,437		2,455		145		7,037		4,143		2,283		129		6,555
Dallas		1,897		3,941		—		5,838		1,890		3,716		—		5,606
Austin		1,440		4,170		—		5,610		1,339		4,002		—		5,341
Northern Virginia		1,079		3,727		8,180		12,986		1,065		3,792		8,112		12,969
South Florida		5,530		296		59		5,885		5,346		258		25		5,629
Suburban Maryland		700		—		3,401		4,101		707		—		3,375		4,082
Seattle		1,247		756		99		2,102		1,337		722		111		2,170

Total		25,302		16,655		13,432		55,389		24,352		16,034		13,202		53,588

NOI
Northern California		33,071		3,539		4,399		41,009		30,173		3,445		4,167		37,785
Southern California		13,044		6,841		227		20,112		12,778		6,621		204		19,603
Dallas		4,416		6,747		—		11,163		3,858		5,763		—		9,621
Austin		2,778		7,026		—		9,804		2,629		7,275		—		9,904
Northern Virginia		2,646		8,400		13,100		24,146		2,621		8,689		12,910		24,220
South Florida		15,092		635		4		15,731		14,629		712		61		15,402
Suburban Maryland		1,550		—		6,043		7,593		1,551		—		5,637		7,188
Seattle		4,046		2,384		261		6,691		3,862		2,192		255		6,309

Total	$	76,643	$	35,572	$	24,034	$	136,249	$	72,101	$	34,697	$	23,234	$	130,032

⁽¹⁾	Rental income includes lease buyout income of $957,000 and $250,000 for the six months ended June 30, 2019 and 2018, respectively.

⁽²⁾

Adjusted cost of operations represents cost of operations excluding non-cash stock compensation expense related to employees whose compensation expense is included in cost of operations. Refer to the “Forward-Looking Statement and Non-GAAP Disclosures” on page 3 for more information. Beginning January 1, 2019, the Company has recorded our divisional vice presidents’ compensation costs within general and administrative expense as we determined that the nature of these individuals’ responsibilities is more consistent with corporate oversight as opposed to direct property operations. As a result of this change, we have reclassified divisional vice presidents’ compensation costs totaling $655,000 for the six months ended June 30, 2018 from adjusted cost of operations into general and administrative expenses in order to conform to the current periods’ presentation. Non-cash compensation expense for our divisional vice presidents, which totaled $302,000 for the six months ended June 30, 2018 had previously been excluded from adjusted cost of operations.

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	For the Six Months Ended		Cost per Weighted
	June 30, 2019		Average Square Foot
Commercial recurring capital expenditures ⁽¹⁾
Same Park
Capital improvements	$	3,368	$	0.13
Tenant improvements		7,372		0.29
Lease commissions		2,977		0.12

Total Same Park recurring capital expenditures		13,717	$	0.54

Non-Same Park
Capital improvements		54	$	0.05
Tenant improvements		1,092		1.01
Lease commissions		171		0.16

Total Non-Same Park recurring capital expenditures		1,317	$	1.22

Total recurring capital expenditures		15,034	$	0.56
Assets sold or held for sale recurring capital expenditures		514

Total commercial recurring capital expenditures		15,548
Non-recurring property renovations ⁽²⁾		1,955

Total capital expenditures (excluding multifamily)		17,503
Multifamily capital expenditures		-

Total capital expenditures	$	17,503

⁽¹⁾

The Company defines “recurring capital expenditures” as capitalized costs necessary to continue to operate the property at its current economic value. Capital improvements in excess of $2,000 with a useful life greater than 24 months are capitalized. Lease transaction costs (i.e. tenant improvements and leasing commissions) of $1,000 or more for leases with terms greater than 12 months are capitalized. First generation lease-up costs on acquired properties are also included in recurring capital expenditures.

⁽²⁾	Non-recurring property renovations represents renovations that substantially enhance the value of a property, including capitalized costs associated with repositioning acquired assets.

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	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018

Net income allocable to common shareholders	$	28,579	$	70,221	$	54,900	$	116,269
Adjustments
Gain on sale of real estate facilities		-		(58,448)		-		(85,283)
Depreciation and amortization		24,768		24,416		49,643		48,298
Net income allocable to noncontrolling interests		7,623		18,400		14,650		30,300
Net income allocable to restricted stock unit holders		212		779		480		1,353
FFO (income) loss allocated to joint venture partner		(37)		(2)		(66)		11

FFO allocable to common and dilutive shares		61,145		55,366		119,607		110,948

Core FFO allocable to common and dilutive shares		61,145		55,366		119,607		110,948
Adjustments
Recurring capital improvements		(2,342)		(2,062)		(3,422)		(3,051)
Tenant improvements		(4,937)		(3,191)		(8,464)		(5,901)
Capitalized lease commissions		(1,305)		(1,736)		(3,148)		(3,574)
Total recurring capital expenditures (assets sold)		(277)		(985)		(514)		(2,451)
Total recurring capital expenditures (multifamily)		-		(6)		-		(13)
Straight-line rent		(652)		(609)		(1,309)		(1,344)
In-place lease adjustment		4		16		25		23
Tenant improvement reimbursement amortization, net of lease incentive amortization		(284)		(619)		(663)		(1,134)
Stock compensation expense		918		671		1,889		1,781
Cash paid for taxes in lieu of shares upon vesting of restricted stock units		(6)		-		(5,500)		(4,529)

FAD allocable to common and dilutive shares		52,264		46,845		98,501		90,755
Distributions to common shareholders		(28,801)		(23,225)		(57,538)		(46,396)
Distributions to noncontrolling interests—common units		(7,670)		(6,209)		(15,341)		(12,419)
Distributions to restricted stock unit holders		(212)		(241)		(480)		(536)
Distributions to noncontrolling interests—joint venture		(45)		-		(45)		-

Free cash available after fixed charges		15,536		17,170		25,097		31,404
Non-recurring property renovations ⁽¹⁾		(1,091)		(61)		(1,955)		(93)
Investment in Highgate ⁽²⁾		-		(949)		-		(3,709)
Investment in The Mile redevelopment ⁽³⁾		(568)		(257)		(993)		(403)

Retained cash	$	13,877	$	15,903	$	22,149	$	27,199


Weighted average outstanding:
Common shares		27,426		27,322		27,400		27,294
Operating partnership units		7,305		7,305		7,305		7,305
Restricted stock units		109		156		132		189
Common share equivalents		106		101		105		101

Total common and dilutive shares		34,946		34,884		34,942		34,889


FFO per common and dilutive share	$	1.75	$	1.59	$	3.42	$	3.18
FAD distribution payout ratio ⁽⁴⁾		70.3%		63.3%		74.5%		65.4%

⁽¹⁾	Non-recurring property renovations represents renovations that substantially enhance the value of a property, including capitalized costs associated with repositioning acquired assets.

⁽²⁾	Represents development costs related to a 395-unit apartment complex that commenced operations during 2017.

⁽³⁾	Represents predevelopment costs related to a multifamily redevelopment project on a large contiguous block of real estate located in Tysons, Virginia.

⁽⁴⁾	FAD distribution payout ratio is equal to total distributions to common shareholders, unit holders, restricted stock unit holders and joint venture partner divided by FAD during the same reporting period.

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	As of June 30, 2019								As of December 31, 2018
			% of Total								% of Total
			Market			WTD Average					Market			WTD Average
	Total		Capitalization			Rate			Total		Capitalization			Rate

Unsecured Debt:
$250.0 million unsecured credit facility (LIBOR + 0.825%)	$	-		-			-		$	-		-			-

Total unsecured debt		-		-			-			-		-			-




Preferred Equity:
5.75% Series U preferred stock (9,200,000 depositary shares outstanding) callable 9/14/17		230,000		3.4	%					230,000		4.2	%
5.70% Series V preferred stock (4,400,000 depositary shares outstanding) callable 3/14/18		110,000		1.6	%					110,000		2.0	%
5.20% Series W preferred stock (7,590,000 depositary shares outstanding) callable 10/20/21		189,750		2.8	%					189,750		3.4	%
5.25% Series X preferred stock (9,200,000 depositary shares outstanding) callable 9/21/22		230,000		3.4	%					230,000		4.2	%
5.20% Series Y preferred stock (8,000,000 depositary shares outstanding) callable 12/7/22		200,000		2.9	%					200,000		3.6	%

Total preferred equity		959,750		14.1	%		5.40	%		959,750		17.4	%		5.40	%



Total debt and preferred equity		959,750		14.1	%		5.40	%		959,750		17.4	%		5.40	%




Common stock (27,429,756 and 27,362,101 shares outstanding as of June 30, 2019 and December 31, 2018, respectively)		4,622,737		67.8	%					3,584,435		65.2	%

Common operating partnership units (7,305,355 units outstanding as of June 30, 2019 and December 31, 2018)		1,231,171		18.1	%					957,002		17.4	%

Total common equity ⁽¹⁾		5,853,908		85.9	%					4,541,437		82.6	%


Total market capitalization	$	6,813,658		100.0	%				$	5,501,187		100.0	%




Ratio of Debt and Preferred Equity to EBITDAre ⁽²⁾		3.3x								3.5x

	For the six months ended June 30, 2019								For the year ended December 31, 2018
Interest expense and related expenses ⁽³⁾	$	272							$	555
Preferred distributions		25,918								51,880

Total fixed charges and preferred distributions	$	26,190							$	52,435


Ratio of EBITDAre to fixed charges and preferred distributions		5.5x								5.3x
Ratio of FFO to fixed charges and preferred distributions		5.6x								5.3x

⁽¹⁾	Total common equity is calculated as the total number of common stock and operating partnership units outstanding multiplied by the Company’s closing share price at the end of each reporting period. Closing share prices on June 30, 2019 and December 31, 2018 were $168.53 and $131.00, respectively.

⁽²⁾	Ratio of debt and preferred equity to EBITDAre is calculated as total debt and preferred equity divided by EBITDAre. Ratio of debt and preferred equity to EBITDAre as of June 30, 2019 is calculated using annualized EBITDAre for the six months ended June 30, 2019.

⁽³⁾	Interest expense and related expenses includes facility fees associated with our unsecured credit facility.

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Industry Concentration as of June 30, 2019 ⁽¹⁾

					Percentage of
					Total Rental Income
Business services						19.5%
Warehouse, distribution, transportation and logistics						12.3%
Computer hardware, software and related services						11.1%
Health services						7.8%
Retail, food, and automotive						7.6%
Engineering and construction						7.6%
Government						7.2%
Insurance and financial services						3.4%
Electronics						2.9%
Home furnishings						2.8%
Aerospace/defense products and services						2.0%
Communications						1.9%
Educational services						1.1%
Other						12.8%

Total						100.0%


Top 10 Customers by Total Annual Rental Income as of June 30, 2019 ⁽¹⁾

	Square Footage		Annualized		Percentage of Total
Customer	Square Footage		Rental Income ⁽²⁾		Annualized Rental Income

US Government		635,000	$	16,867		4.2%
Luminex Corp		199,000		3,992		1.0%
Lockheed Martin Corp		143,000		2,523		0.6%
KZ Kitchen Cabinet & Stone		191,000		2,413		0.6%
CentralColo, LLC		96,000		2,307		0.6%
Applied Materials, Inc.		162,000		2,264		0.6%
Carbel, LLC		207,000		2,078		0.5%
Investorplace Media, LLC		46,000		1,950		0.5%
ECS Federal, LLC		81,000		1,794		0.5%
MAXIMUS, Inc.		76,000		1,702		0.4%

Total		1,836,000	$	37,890		9.5%


Tenant Composition as of June 30, 2019 ⁽¹⁾

					Average Tenant Size
			Number		(in square feet)
			of Tenants		Average square footage
Large Tenants ⁽³⁾				1,365		12,901
Small Tenants ⁽⁴⁾				3,503		2,210

Total Portfolio				4,868		5,208

⁽¹⁾	Excludes assets held for sale as of June 30, 2019.

⁽²⁾	For leases expiring within one year, annualized rental income includes only the income to be received under the existing lease from July 1, 2019 through the respective date of expiration.

⁽³⁾	Large tenant portfolio consists of properties with average leases greater than or equal to 5,000 square feet.

⁽⁴⁾	Small tenant portfolio consists of properties with average leases less than 5,000 square feet.

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Realized Revenue per Occupied Square Foot ⁽¹⁾ ⁽²⁾
	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
Region	2019		2018		% Change	2019		2018		% Change

Northern California	$	15.44	$	13.98	10.4%	$	15.17	$	13.85	9.5%
Southern California	$	17.43	$	16.34	6.7%	$	17.38	$	16.29	6.7%
Dallas	$	12.96	$	11.91	8.8%	$	12.72	$	11.95	6.4%
Austin	$	17.38	$	17.14	1.4%	$	17.26	$	16.59	4.0%
Northern Virginia	$	19.69	$	20.31	(3.1%)	$	20.12	$	20.75	(3.0%)
South Florida	$	11.74	$	11.24	4.4%	$	11.72	$	11.31	3.6%
Suburban Maryland	$	20.36	$	21.68	(6.1%)	$	20.64	$	21.63	(4.6%)
Seattle	$	13.31	$	12.45	6.9%	$	13.23	$	12.43	6.4%
Total	$	15.77	$	15.08	4.6%	$	15.71	$	15.06	4.3%


Revenue per Available Foot (RevPAF) ⁽¹⁾ ⁽³⁾
	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
Region	2019		2018		% Change	2019		2018		% Change

Northern California	$	14.79	$	13.68	8.1%	$	14.59	$	13.53	7.8%
Southern California	$	16.50	$	16.06	2.7%	$	16.54	$	15.94	3.8%
Dallas	$	12.03	$	10.36	16.1%	$	11.78	$	10.55	11.7%
Austin	$	15.87	$	15.91	(0.3%)	$	15.70	$	15.53	1.1%
Northern Virginia	$	18.65	$	18.70	(0.3%)	$	18.96	$	18.99	(0.2%)
South Florida	$	11.10	$	10.82	2.6%	$	11.18	$	10.88	2.8%
Suburban Maryland	$	18.32	$	18.08	1.3%	$	18.59	$	17.92	3.7%
Seattle	$	12.66	$	12.21	3.7%	$	12.65	$	12.20	3.7%
Total	$	14.87	$	14.25	4.4%	$	14.85	$	14.23	4.4%


Realized Revenue per Occupied Square Foot ⁽¹⁾ ⁽²⁾
	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
Region	2019		2018		% Change	2019		2018		% Change
Industrial	$	13.09	$	12.14	7.8%	$	12.94	$	12.10	6.9%
Flex	$	18.54	$	18.32	1.2%	$	18.57	$	18.13	2.4%
Office	$	24.51	$	25.11	(2.4%)	$	24.93	$	25.58	(2.5%)
Total	$	15.77	$	15.08	4.6%	$	15.71	$	15.06	4.3%


Revenue per Available Foot (RevPAF) ⁽¹⁾ ⁽³⁾
	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
Region	2019		2018		% Change	2019		2018		% Change
Industrial	$	12.46	$	11.78	5.8%	$	12.38	$	11.72	5.6%
Flex	$	17.14	$	16.68	2.8%	$	17.13	$	16.64	2.9%
Office	$	22.84	$	22.22	2.8%	$	23.09	$	22.46	2.8%
Total	$	14.87	$	14.25	4.4%	$	14.85	$	14.23	4.4%

⁽¹⁾	Rental income includes lease buyout income of $780,000 and $122,000 for the three months ended June 30, 2019 and 2018, respectively, and $957,000 and $250,000 for the six months ended June 30, 2019 and 2018, respectively.

⁽²⁾	Represents revenue earned per occupied square foot. For the three and six month periods ending June 30, 2019 and 2018, rental income amounts have been annualized.

⁽³⁾	Represents revenue earned per total weighted average available square foot. For the three and six month periods ending June 30, 2019 and 2018, rental income amounts have been annualized.

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⁽¹⁾	Excludes assets held for sale as of June 30, 2019.

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Rentable Square Footage of Same Park Properties as of June 30, 2019 ⁽¹⁾


Markets	Industrial		Flex		Office		Total		% of Total

Northern Virginia		507		1,440		1,970		3,917		15.2%
South Florida		3,728		126		12		3,866		15.0%
Silicon Valley		3,094		367		-		3,461		13.4%
East Bay		3,297		53		-		3,350		13.0%
Dallas		1,300		1,587		-		2,887		11.2%
Suburban Maryland		394		-		864		1,258		4.8%
Austin		755		1,208		-		1,963		7.6%
Los Angeles County		1,256		317		31		1,604		6.2%
Seattle		1,092		270		28		1,390		5.4%
Orange County		810		101		-		911		3.5%
San Diego County		233		535		-		768		3.0%
Mid-Peninsula		-		94		340		434		1.7%

Total		16,466		6,098		3,245		25,809		100.0%

Percentage by Product Type		63.8%		23.6%		12.6%		100.0%

Same Park Weighted Average Occupancy Rates by Product Type for the Three Months Ended June 30, 2019 ⁽¹⁾

Markets			Industrial		Flex		Office		Total

Northern Virginia				93.3%		97.3%		93.2%		94.7%
South Florida				94.8%		85.0%		100.0%		94.5%
Silicon Valley				96.9%		96.9%		-		96.9%
East Bay				95.0%		96.1%		-		95.0%
Dallas				96.1%		90.0%		-		92.7%
Suburban Maryland				85.2%		-		91.8%		89.7%
Austin				98.9%		86.5%		-		91.3%
Los Angeles County				93.6%		95.8%		94.0%		94.1%
Seattle				95.1%		94.5%		100.0%		95.1%
Orange County				94.4%		100.0%		-		95.0%
San Diego County				97.3%		95.0%		-		95.7%
Mid-Peninsula				-		89.0%		94.1%		93.0%
Total				95.2%		92.5%		93.0%		94.3%

Same Park Weighted Average Occupancy Rates by Portfolio Type for the Three Months Ended June 30, 2019 ⁽¹⁾ ⁽²⁾

Markets					Large Tenant		Small Tenant		Total

Northern Virginia						94.9%		94.5%		94.7%
South Florida						94.7%		93.6%		94.5%
Silicon Valley						97.6%		93.8%		96.9%
East Bay						94.6%		99.3%		95.0%
Dallas						92.7%		92.7%		92.7%
Suburban Maryland						91.9%		87.3%		89.7%
Austin						93.1%		78.0%		91.3%
Los Angeles County						91.2%		96.4%		94.1%
Seattle						94.9%		95.5%		95.1%
Orange County						93.8%		96.6%		95.0%
San Diego County						-		95.7%		95.7%
Mid-Peninsula						-		93.0%		93.0%
Total						94.6%		93.6%		94.3%

⁽¹⁾	Excludes assets held for sale as of June 30, 2019.

⁽²⁾	The Company’s “large tenant” portfolio consists of properties with average leases greater than or equal to 5,000 square feet while the “small tenant” portfolio consists of properties with average leases less than 5,000 square feet.

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Same Park Weighted Average Occupancy Rates by Product Type for the Six Months Ended June 30, 2019 ⁽¹⁾

Markets	Industrial		Office		Flex		Total

Northern Virginia		93.6%		92.6%		96.7%		94.2%
South Florida		95.9%		82.9%		88.9%		95.4%
Silicon Valley		97.0%		-		96.7%		97.0%
East Bay		95.7%		-		96.0%		95.7%
Dallas		96.3%		-		89.5%		92.5%
Suburban Maryland		86.3%		91.4%		-		89.8%
Austin		98.5%		-		86.3%		91.0%
Los Angeles County		94.9%		94.9%		96.0%		95.1%
Seattle		95.4%		100.0%		96.1%		95.6%
Orange County		94.7%		-		99.3%		95.2%
San Diego County		97.5%		-		94.4%		95.3%
Mid-Peninsula		-		94.0%		90.8%		93.3%
Total		95.7%		92.5%		92.2%		94.5%

Same Park Weighted Average Occupancy Rates by Portfolio Type for the Six Months Ended June 30, 2019 ⁽¹⁾ ⁽²⁾

Markets			Large Tenant		Small Tenant		Total

Northern Virginia				94.2%		94.2%		94.2%
South Florida				95.8%		94.3%		95.4%
Silicon Valley				97.6%		94.2%		97.0%
East Bay				95.4%		99.3%		95.7%
Dallas				92.4%		92.8%		92.5%
Suburban Maryland				91.8%		87.6%		89.8%
Austin				92.7%		78.6%		91.0%
Los Angeles County				93.7%		96.2%		95.1%
Seattle				95.2%		96.6%		95.6%
Orange County				94.7%		95.9%		95.2%
San Diego County				-		95.3%		95.3%
Mid-Peninsula				-		93.3%		93.3%
Total				94.9%		93.7%		94.5%

⁽¹⁾	Excludes assets held for sale as of June 30, 2019.

⁽²⁾	The Company’s “large tenant” portfolio consists of properties with average leases greater than or equal to 5,000 square feet while the “small tenant” portfolio consists of properties with average leases less than 5,000 square feet.

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Rentable Square Footage of Properties as of June 30, 2019 ⁽¹⁾

Markets	Industrial		Flex		Office		Total		% of Total

Northern Virginia		1,564		1,440		1,970		4,974		18.5%
South Florida		3,728		126		12		3,866		14.3%
Silicon Valley		3,094		367		-		3,461		12.8%
East Bay		3,297		53		-		3,350		12.4%
Dallas		1,300		1,587		-		2,887		10.7%
Suburban Maryland		394		-		864		1,258		4.7%
Austin		755		1,208		-		1,963		7.3%
Los Angeles County		1,330		317		31		1,678		6.2%
Seattle		1,092		270		28		1,390		5.2%
Orange County		810		101		-		911		3.4%
San Diego County		233		535		-		768		2.9%
Mid-Peninsula		-		94		340		434		1.6%

Total		17,597		6,098		3,245		26,940		100.0%

Percentage by Product Type		65.3%		22.6%		12.1%		100.0%

Weighted Average Occupancy Rates by Product Type for the Three Months Ended June 30, 2019 ⁽¹⁾

Markets			Industrial		Flex		Office		Total


Northern Virginia				85.1%		97.3%		93.2%		91.8%
South Florida				94.8%		85.0%		100.0%		94.5%
Silicon Valley				96.9%		96.9%		-		96.9%
East Bay				95.0%		96.1%		-		95.0%
Dallas				96.1%		90.0%		-		92.7%
Suburban Maryland				85.2%		-		91.8%		89.7%
Austin				98.9%		86.5%		-		91.3%
Los Angeles County				93.8%		95.8%		94.0%		94.2%
Seattle				95.1%		94.5%		100.0%		95.1%
Orange County				94.4%		100.0%		-		95.0%
San Diego County				97.3%		95.0%		-		95.7%
Mid-Peninsula				-		89.0%		94.1%		93.0%
Total				94.4%		92.5%		93.0%		93.8%

Weighted Average Occupancy Rates by Portfolio Type for the Three Months Ended June 30, 2019 ⁽¹⁾ ⁽²⁾

Markets					Large Tenant		Small Tenant		Total


Northern Virginia						90.7%		94.2%		91.8%
South Florida						94.7%		93.6%		94.5%
Silicon Valley						97.6%		93.8%		96.9%
East Bay						94.6%		99.3%		95.0%
Dallas						92.7%		92.7%		92.7%
Suburban Maryland						91.9%		87.3%		89.7%
Austin						93.1%		78.0%		91.3%
Los Angeles County						91.2%		96.5%		94.2%
Seattle						94.9%		95.5%		95.1%
Orange County						93.8%		96.6%		95.0%
San Diego County						-		95.7%		95.7%
Mid-Peninsula						-		93.0%		93.0%
Total						93.8%		93.6%		93.8%

⁽¹⁾	Excludes assets held for sale as of June 30, 2019.

⁽²⁾	The Company’s “large tenant” portfolio consists of properties with average leases greater than or equal to 5,000 square feet while the “small tenant” portfolio consists of properties with average leases less than 5,000 square feet.

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Weighted Average Occupancy Rates by Product Type for the Six Months Ended June 30, 2019 ⁽¹⁾

Markets	Industrial		Office		Flex		Total


Northern Virginia		84.3%		92.6%		96.7%		91.2%
South Florida		95.9%		82.9%		88.9%		95.4%
Silicon Valley		97.0%		-		96.7%		97.0%
East Bay		95.7%		-		96.0%		95.7%
Dallas		96.3%		-		89.5%		92.5%
Suburban Maryland		86.3%		91.4%		-		89.8%
Austin		98.5%		-		86.3%		91.0%
Los Angeles County		94.9%		94.9%		96.0%		95.1%
Seattle		95.4%		100.0%		96.1%		95.6%
Orange County		94.7%		-		99.3%		95.2%
San Diego County		97.5%		-		94.4%		95.3%
Mid-Peninsula		-		94.0%		90.8%		93.3%
Total		94.8%		92.5%		92.2%		93.9%

Weighted Average Occupancy Rates by Portfolio Type for the Six Months Ended June 30, 2019 ⁽¹⁾ ⁽²⁾

Markets			Large Tenant		Small Tenant		Total


Northern Virginia				90.0%		93.6%		91.2%
South Florida				95.8%		94.3%		95.4%
Silicon Valley				97.6%		94.2%		97.0%
East Bay				95.4%		99.3%		95.7%
Dallas				92.4%		92.8%		92.5%
Suburban Maryland				91.8%		87.6%		89.8%
Austin				92.7%		78.6%		91.0%
Los Angeles County				93.7%		96.2%		95.1%
Seattle				95.2%		96.6%		95.6%
Orange County				94.7%		95.9%		95.2%
San Diego County				-		95.3%		95.3%
Mid-Peninsula				-		93.3%		93.3%
Total				94.1%		93.6%		93.9%

⁽¹⁾	Excludes assets held for sale as of June 30, 2019.

⁽²⁾	The Company’s “large tenant” portfolio consists of properties with average leases greater than or equal to 5,000 square feet while the “small tenant” portfolio consists of properties with average leases less than 5,000 square feet.

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Lease Expirations - Industrial ⁽¹⁾
			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽²⁾		%		Rental Income

2019		2,578	$	32,563		14.2%		7.6%
2020		4,017		51,510		22.4%		12.2%
2021		2,839		40,141		17.4%		9.5%
2022		2,602		36,329		15.8%		8.6%
2023		1,971		27,282		11.9%		6.5%
Thereafter		2,830		42,102		18.3%		9.9%

Total		16,837	$	229,927		100.0%		54.3%


Lease Expirations - Flex ⁽¹⁾
			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽²⁾		%		Rental Income

2019		750	$	14,244		12.7%		3.5%
2020		1,313		23,479		20.9%		5.5%
2021		1,156		21,967		19.5%		5.2%
2022		1,006		21,580		19.2%		5.1%
2023		435		8,911		7.9%		2.1%
Thereafter		1,039		22,184		19.8%		5.2%

Total		5,699	$	112,365		100.0%		26.6%


Lease Expirations - Office ⁽¹⁾
			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽²⁾		%		Rental Income

2019		297	$	7,977		9.8%		1.9%
2020		784		21,127		25.9%		5.0%
2021		458		11,115		13.6%		2.6%
2022		450		12,664		15.5%		2.9%
2023		399		10,205		12.5%		2.4%
Thereafter		674		18,487		22.7%		4.3%

Total		3,062	$	81,575		100.0%		19.1%

⁽¹⁾	Excludes assets held for sale as of June 30, 2019.

⁽²⁾	Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-letting of expiring spaces.

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Lease Expirations - Southern California

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		455	$	8,794		14.8%		2.1%
2020		1,045		17,634		29.7%		4.2%
2021		674		12,833		21.5%		3.0%
2022		536		10,085		17.0%		2.4%
2023		193		4,081		6.9%		1.0%
Thereafter		289		5,983		10.1%		1.4%

Total		3,192	$	59,410		100.0%		14.1%


Lease Expirations - Northern California

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		1,375	$	18,973		16.5%		4.5%
2020		1,410		24,278		21.0%		5.7%
2021		1,131		19,064		16.5%		4.5%
2022		1,031		16,765		14.5%		4.0%
2023		782		13,019		11.3%		3.1%
Thereafter		1,361		23,333		20.2%		5.5%

Total		7,090	$	115,432		100.0%		27.3%


Lease Expirations - Austin

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		155	$	2,780		8.6%		0.7%
2020		341		5,271		16.2%		1.2%
2021		318		5,655		17.4%		1.3%
2022		310		5,398		16.7%		1.3%
2023		176		3,063		9.4%		0.7%
Thereafter		504		10,294		31.7%		2.4%

Total		1,804	$	32,461		100.0%		7.6%


Lease Expirations - Dallas

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		350	$	4,513		12.6%		1.1%
2020		703		8,234		23.1%		1.9%
2021		511		6,913		19.4%		1.6%
2022		300		4,230		11.9%		1.0%
2023		326		4,402		12.3%		1.0%
Thereafter		505		7,391		20.7%		1.7%

Total		2,695	$	35,683		100.0%		8.3%

⁽¹⁾	Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-letting of expiring spaces.

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Lease Expirations - South Florida

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		483	$	5,064		11.4%		1.1%
2020		834		9,923		22.4%		2.4%
2021		736		9,135		20.6%		2.2%
2022		596		7,099		16.0%		1.6%
2023		545		6,682		15.1%		1.6%
Thereafter		510		6,405		14.5%		1.5%

Total		3,704	$	44,308		100.0%		10.4%


Lease Expirations - Northern Virginia

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		640	$	11,693		12.7%		2.8%
2020		1,079		19,839		21.6%		4.7%
2021		680		12,371		13.5%		2.9%
2022		935		21,182		23.1%		5.0%
2023		403		8,115		8.8%		1.9%
Thereafter		910		18,646		20.3%		4.4%

Total		4,647	$	91,846		100.0%		21.7%


Lease Expirations - Suburban Maryland ⁽²⁾

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		50	$	866		3.4%		0.2%
2020		219		4,976		19.3%		1.2%
2021		195		3,729		14.5%		0.9%
2022		145		2,709		10.5%		0.6%
2023		205		4,543		17.7%		1.1%
Thereafter		336		8,896		34.6%		2.1%

Total		1,150	$	25,719		100.0%		6.1%


Lease Expirations - Seattle

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		117	$	2,101		11.1%		0.5%
2020		483		5,961		31.4%		1.4%
2021		208		3,523		18.5%		0.9%
2022		205		3,105		16.3%		0.7%
2023		175		2,493		13.1%		0.6%
Thereafter		128		1,825		9.6%		0.4%

Total		1,316	$	19,008		100.0%		4.5%

⁽¹⁾	Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-letting of expiring spaces.

⁽²⁾	Excludes assets held for sale as of June 30, 2019.

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Lease Expirations - Large Tenant Portfolio ⁽¹⁾ ⁽²⁾

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽⁴⁾		%		Rental Income
2019		2,356	$	32,557		12.1%		7.8%
2020		3,861		52,443		19.6%		12.4%
2021		2,688		38,823		14.5%		9.2%
2022		2,959		48,098		17.9%		11.3%
2023		2,100		30,974		11.5%		7.3%
Thereafter		3,832		65,410		24.4%		15.4%

Total		17,796	$	268,305		100.0%		63.4%


Lease Expirations - Small Tenant Portfolio ⁽¹⁾ ⁽³⁾

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽⁴⁾		%		Rental Income
2019		1,269	$	22,227		14.3%		5.2%
2020		2,253		43,673		28.1%		10.3%
2021		1,765		34,400		22.1%		8.1%
2022		1,099		22,475		14.4%		5.3%
2023		705		15,424		9.9%		3.7%
Thereafter		711		17,363		11.2%		4.0%

Total		7,802	$	155,562		100.0%		36.6%


Lease Expirations - Total Portfolio ⁽¹⁾

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽⁴⁾		%		Rental Income
2019		3,625	$	54,784		13.0%		13.0%
2020		6,114		96,116		22.7%		22.7%
2021		4,453		73,223		17.3%		17.3%
2022		4,058		70,573		16.6%		16.6%
2023		2,805		46,398		11.0%		11.0%
Thereafter		4,543		82,773		19.4%		19.4%

Total		25,598	$	423,867		100.0%		100.0%

⁽¹⁾	Excludes assets held for sale as of June 30, 2019.

⁽²⁾	Large tenant portfolio consists of properties with average leases greater than or equal to 5,000 square feet.

⁽³⁾	Small tenant portfolio consists of properties with average leases less than 5,000 square feet.

⁽⁴⁾	Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-letting of expiring spaces.

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	Total Portfolio Activity ⁽¹⁾
	Wtd. Avg.						Leasing				Customer						Transaction Costs				Transaction						Cash Rental Rate
	Occupancy						Volume				Retention						per Executed Foot				Costs ⁽²⁾						Change ⁽³⁾
	QTD			YTD			QTD		YTD		QTD			YTD			QTD		YTD		QTD			YTD			QTD			YTD

Northern Virginia		91.8	%		91.2	%		358,000		678,000		82.2	%		79.8	%	$	6.95	$	6.22		9.1	%		9.8	%		1.0	%		0.3	%

South Florida		94.5	%		95.4	%		228,000		447,000		33.8	%		46.9	%	$	2.65	$	2.15		4.7	%		4.0	%		10.8	%		13.3	%

Silicon Valley		96.9	%		97.0	%		91,000		278,000		57.9	%		64.2	%	$	2.18	$	2.15		3.1	%		2.3	%		9.7	%		18.4	%

East Bay		95.0	%		95.7	%		271,000		387,000		96.5	%		44.1	%	$	2.48	$	2.15		3.8	%		3.2	%		23.6	%		24.8	%

Dallas		92.7	%		92.5	%		150,000		434,000		65.2	%		73.8	%	$	3.49	$	5.34		7.5	%		11.4	%		10.3	%		8.1	%

Suburban Maryland		89.7	%		89.8	%		52,000		74,000		60.9	%		50.6	%	$	10.61	$	11.01		14.5	%		14.8	%		-9.2	%		-7.6	%

Austin		91.3	%		91.0	%		114,000		158,000		92.5	%		76.2	%	$	4.82	$	4.56		9.0	%		8.4	%		6.3	%		6.0	%

Los Angeles		94.2	%		95.1	%		178,000		338,000		81.8	%		74.2	%	$	1.73	$	1.58		3.6	%		3.0	%		13.6	%		15.7	%

Seattle		95.1	%		95.6	%		74,000		151,000		86.5	%		66.5	%	$	0.87	$	0.90		1.8	%		1.7	%		15.4	%		17.2	%

Orange County		95.0	%		95.2	%		39,000		114,000		47.6	%		62.4	%	$	2.03	$	2.14		2.4	%		2.7	%		7.8	%		3.0	%

San Diego		95.7	%		95.3	%		98,000		174,000		74.1	%		68.7	%	$	1.15	$	2.28		2.6	%		4.3	%		5.4	%		7.8	%

Mid-Peninsula		93.0	%		93.3	%		36,000		63,000		76.2	%		58.4	%	$	1.27	$	1.15		1.2	%		1.2	%		8.5	%		8.8	%

Company Totals by Market		93.8	%		93.9	%		1,689,000		3,296,000		72.1	%		65.3	%	$	3.67	$	3.59		5.9	%		5.8	%		9.0	%		9.7	%

Industrial		94.4	%		94.8	%		1,086,000		2,150,000		69.1	%		62.1	%	$	2.37	$	2.33		4.3	%		4.1	%		13.1	%		14.4	%

Flex		92.5	%		92.2	%		367,000		706,000		75.8	%		69.7	%	$	4.88	$	5.41		7.6	%		8.7	%		8.5	%		8.5	%

Office		93.0	%		92.5	%		236,000		440,000		78.1	%		73.9	%	$	7.77	$	6.86		8.4	%		8.2	%		0.7	%		0.6	%

Company Totals by Type		93.8	%		93.9	%		1,689,000		3,296,000		72.1	%		65.3	%	$	3.67	$	3.59		5.9	%		5.8	%		9.0	%		9.7	%

⁽¹⁾	Excludes assets held for sale as of June 30, 2019.

⁽²⁾	Transaction cost percentages are computed by taking the total transaction costs divided by the total rents (including estimated expense recoveries) over the term of the lease.

⁽³⁾

Cash rental rate change percentages are computed by taking the percentage difference between outgoing rents (including estimated expense recoveries) and incoming rents (including estimated expense recoveries) for leases executed during the period. Leases executed on spaces vacant for more than the preceding twelve months have been excluded.

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Total Costs ⁽¹⁾

Construction

Property Information

Location

Apartment Units

(in thousands)

Completion

Highgate at the Mile

Tysons, VA

395

115,426

Q4 2017

As of June 30, 2019

Period end occupancy

94.2

Average rent per unit ⁽²⁾

2,076

⁽¹⁾	The total costs of the project include contributed land value of $21.0 million plus unrealized land appreciation of $6.0 million. The unrealized land appreciation of $6.0 million is not recorded on our balance sheet.

⁽²⁾	Average rent per unit is defined as the total potential monthly rental revenue (i.e. actual rent for occupied apartment units plus market rent for vacant apartment units) divided by the number of rentable units.