<PAGE>
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) April 26, 1999
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WASHINGTON REAL ESTATE INVESTMENT TRUST
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(Exact name of registrant as specified in its charter)
Maryland 1-6622 53-0261100
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(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification Number)
6110 Executive Boulevard, Suite 800, Rockville, Maryland 20852
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (301) 984-9400
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ITEM 5 OTHER EVENTS
Attached hereto as Exhibit 99.1 is a copy of certain Supplemental
Disclosures included in Washington Real Estate Investment Trust's press release,
dated April 26,1999.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit
Number
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99.1 Press Release, April 26,1999, entitled "1st
Quarter 1999 FFO Per Share Up 6%"
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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 thereunto duly authorized.
WASHINGTON REAL ESTATE INVESTMENT TRUST
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(Registrant)
By: /s/ Larry E. Finger
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(Signature)
Larry E. Finger
Senior Vice President
Chief Financial Officer
May 3, 1999
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(Date)
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Exhibit
Number
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99.1 Press Release, April 26,1999, entitled "1st Quarter 1999 FFO
Per Share Up 6%"
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NEWS RELEASE
[LETTERHEAD OF WASHINGTON REAL ESTATE INVESTMENT TRUST APPEARS HERE]
CONTACT: 6110 Executive Boulevard Listed: NYSE
Larry E. Finger Suite 800 Trading Symbol: WRE
Senior V.P. - C.F.O. Rockville, Maryland 20852 Newspaper Quote: WRIT
Direct Dial: (301) 255-0820 Tel 301-984-9400 www.washreit.com
E-Mail: [email protected] Fax 301-984-9610 ----------------
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FOR IMMEDIATE RELEASE April 26, 1999
Page 1 of 6
WASHINGTON REAL ESTATE INVESTMENT TRUST
1st Quarter 1999 FFO Per Share Up 6%
Washington Real Estate Investment Trust (WRIT) reported today that Funds From
Operations (FFO) increased 5% to $12,900,000 for the quarter ended March 31,
1999 from $12,227,000 for the quarter ended March 31, 1998. FFO per share
increased 6% to $0.36 in the first quarter of 1999 from $0.34 in the first
quarter of 1998. Funds From Operations (FFO) is the primary performance measure
for the REIT industry.
Edmund B. Cronin, Jr., President and CEO, stated that WRIT's FFO growth is due
to the strong performance of recent acquisitions combined with core portfolio
net operating income increases of 4%, and reduced general and administrative
expenses. WRIT's core portfolio excludes properties not owned for the entirety
of both periods being compared.
WRIT's Q1 1999 vs. Q1 1998 FFO per share growth was reduced by two temporary
factors. In 1999, WRIT incurred significantly higher snow removal and utility
costs as compared to 1998's very mild winter. In addition, Q1 1999 earnings were
reduced by the fact that $22 Million in proceeds from first quarter property
dispositions had not yet been reinvested. Subsequent to the quarter end, $7.5
Million of these proceeds was reinvested in Sully Square, a 95,000 square foot
industrial property anticipated to produce a first year return on investment of
9.9%. WRIT anticipates investing the balance of the proceeds during the second
quarter.
WRIT is a self-administered, self-managed, equity real estate investment trust
investing in income-producing properties in the greater Washington-Baltimore
region. The Trust owns a diversified portfolio of 53 properties consisting of 12
retail centers, 18 office buildings, 8 apartment properties and 15
industrial/flex properties.
CONTINUED
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FOR IMMEDIATE RELEASE April 26, 1999
Page 2 of 6
WRIT has paid consecutive quarterly dividends to its shareholders for 36 years
and the annual dividend paid has increased every year for the past 28 years.
WRIT's shares are publicly traded on the New York Stock Exchange (symbol: WRE).
Certain statements in this press release are "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements involve known and unknown risks, uncertainties and other factors that
may cause actual results to differ materially. Such risks, uncertainties and
other factors include, but are not limited to, fluctuations in interest rates,
availability of raw materials and labor costs, levels of competition, the effect
of government regulation, the availability of capital, weather conditions and
changes in general economic conditions.
CONTINUED
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FOR IMMEDIATE RELEASE April 26, 1999
Page 3 of 6
WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(in thousands except per share data)
Quarter Ended March 31,
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OPERATING RESULTS 1999 1998
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Real estate rental revenue $27,654 $24,501
Real estate expenses (8,423) (7,149)
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19,231 17,352
Real estate depreciation and amortization (4,451) (3,641)
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Income from real estate $14,780 $13,711
Other income 204 230
Interest expense (5,220) (3,778)
General and administrative (1,315) (1,527)
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Income before gain on sale of real estate $8,449 $8,636
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Gain on sale of real estate 7,909 5,863
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Net Income $16,358 $14,499
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Income before gain on real estate per share $0.24 $0.24
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Net income per share $0.46 $0.41
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Income before gain on sale of real estate $8,449 $8,636
Real estate depreciation and amortization 4,451 3,641
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Funds from operations $12,900 $12,227
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Funds from operations per share $0.36 $0.34
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Dividends paid per share $0.28 $0.27
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Weighted average shares outstanding 35,708,178 35,683,987
AS OF AS OF
BALANCE SHEET DATA March 31, 1999 March 31, 1998
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Cash and temporary investments $23,773 $4,595
Real estate assets, at cost (1) 593,801 598,874
Total assets, at cost (1) 639,409 627,008
Lines of credit payable 54,000 44,000
Mortgage notes payable 28,779 28,912
Notes payable 210,000 210,000
Total liabilities 308,408 303,447
Shareholders' equity 260,365 253,733
Shareholders' equity, at cost (1) $329,471 $322,034
(1) At cost means adding back accumulated depreciation.
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Washington Real Estate Investment Trust
Q1 1999 Supplemental Disclosures
Page 4 of 6
Core Portfolio Operating Income (NOI) Growth, Rental Rate Growth and Operating
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Expense Increase By Sector - 1st Quarter 1999 vs. 1st Quarter 1998
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Rental Rate Operating
Sector NOI Growth Growth Exp. Increase
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Apartments 1.4% 3.8% 10.7%
Office Buildings 3.8% 4.2% 7.0%
Retail Centers 6.7% 2.6% 7.9%
Industrial/Flex Centers 8.0% 4.7% 10.0%
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Overall Core Portfolio 4.3% 3.9% 8.3%
Core Portfolio & Overall Occupancy Levels By Sector
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Core Portfolio All Properties
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1st QTR 1st QTR 1st QTR 1st QTR
Sector 1999 1998 1999 1998
- ------ ---- ---- ---- ----
Apartments 95.4% 94.8% 95.4% 94.8%
Office Buildings 98.5% 96.4% 98.4% 96.4%
Retail Centers 93.9% 95.9% 94.2% 95.4%
Industrial/Flex Centers 94.6% 95.5% 93.6% 95.3%
----- ----- ----- -----
Overall Portfolio 96.7% 95.8% 96.5% 95.8%
Q1 1999 Commercial Leasing Activity
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In Q1 1999, WRIT executed leases for 149,435 square feet of commercial space at
a weighted average initial face rate of $15.16 psf. This represents an increase
of 11.8% ($1.61 psf) over the prior rent in place on a cash, i.e., non-straight
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line basis. Details by sector are as follows:
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Previous New
Sector Square Feet Face Rent Face Rent $ Increase % Increase
- ------ ----------- --------- --------- ---------- ----------
Office 62,235 $ 20.59 $ 22.52 $ 1.93 9.4%
Retail 20,913 18.50 22.32 3.82 20.6%
Industrial/Flex 66,287 5.39 6.00 .61 11.3%
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Overall 149,435 $ 13.56 $ 15.16 $ 1.61 11.8%
CONTINUED
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Washington Real Estate Investment Trust
Q1 1999 Supplemental Disclosures
Page 5 of 6
Q1 1999 Commercial Leasing Activity (contd.)
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Sector Avg Term Avg Size Avg TI
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Office 2.5 1,682 $2.40
Retail 3.7 1,307 0.00
Industrial/Flex 3.2 4,735 .99
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Overall 3.0 2,230 $1.44
Northern Virginia Industrial Park Update. On May 22, 1998 WRIT acquired the
790,000 square foot Northern Virginia Industrial Park (NVIP). At acquisition,
the property was 82.8% leased at an average per square foot rent of $4.25 NNN.
WRIT previously disclosed that the property had been under-managed and that the
market vacancy rate was approximately 1/2 the project vacancy rate. In addition,
WRIT indicated that market rents for the property, in a well managed condition,
would range from $5.00 to $5.50 NNN, depending on the interior office build-out
of the various spaces.
As of March 31, 1999, i.e., in the 10 months since acquisition, WRIT has
executed leases for 206,000 square feet at a weighted average $5.44 NNN psf.
This average rent is 27% over the average rent in the park at acquisition. NVIP
was 86% leased as of 3/31/99.
Q1 1999 Acquisitions
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Dulles South IV, two flex/warehouse buildings containing 83,000 rentable square
feet in Chantilly, VA, was acquired for $6.84 Million, all cash, on 1/28/99. The
buildings are 100% leased and in excellent physical condition. Dulles South IV
is anticipated to produce a first year cash return on investment of over 10%.
The property is located in the fully completed Sullyfield Business Park, which
contains approximately 1.6 million square feet in 28 buildings. The Park lies
directly across Route 50 from Dulles Business Park, another master-planned park
containing the 92,000-square foot Earhart Building, a 100% leased flex building
purchased by WRIT in December 1996.
Approximately $1.75 Million of the cash required for this purchase was provided
by WRIT's recent sale of the Dover Mart Shopping Center, thereby allowing WRIT
to defer recognition of the Dover Mart gain on sale for tax purposes.
CONTINUED
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Washington Real Estate Investment Trust
Q1 1999 Supplemental Disclosures
Page 6 of 6
Q1 1999 Dispositions
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Pursuant to our strategic plan to dispose of properties which do not fit our
long-term objectives, on February 8, 1999 WRIT sold 444 N. Frederick Road,
a 67,000 square foot office building in Gaithersburg, Maryland, 4420 N. Fairfax
Drive, a 67,000 square foot office building located in Arlington, Virginia and
5285 Port Royal Road, a 109,000 square foot industrial distribution facility in
Springfield, Virginia, for $22.5 Million. On February 26, 1999 WRIT sold 3525 V
Street, NE, Washington, DC, a 30,800 square foot industrial distribution
facility for $600,000. These sales resulted in a $7.9 Million gain.
WRIT anticipates that these sales will be the first step of a tax-deferred
exchange whereby WRIT reinvests the sales proceeds on a tax-free basis in other
real estate properties.
WRIT's strategic disposition plan commenced in 1998 and has thus far resulted in
the sale of seven properties for a total of $34.5 Million, yielding a gain of
$14.9 Million.
END
