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) FEBRUARY 22, 2000
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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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<PAGE>
Item 5: OTHER EVENTS
Attached hereto as Exhibit 99.1 is a copy of certain Supplemental Data
included in the Trust's press release, dated February 22, 2000.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit
Number
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99.1 Press Release, February 22, 2000, entitled "Supplemental
Data"
<PAGE>
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
February 22, 2000
----------------------
(Date)
<PAGE>
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
---------------------------------------
(Registrant)
By:
-----------------------------------
(Signature)
Larry E. Finger
Senior Vice President
Chief Financial Officer
February 22, 2000
----------------------
(Date)
<PAGE>
Exhibit
Number
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99.1 Press Release, February 22, 2000, entitled "Supplemental Data"
NEWS RELEASE
[WRIT GRAPHIC APPEARS HERE]
WASHINGTON REAL ESTATE INVESTMENT TRUST
<TABLE>
<CAPTION>
<S> <C>
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.writ.com
E-Mail: [email protected] Fax 301-984-9610
FOR IMMEDIATE RELEASE FEBRUARY 22, 2000
PAGE 1 OF 7
</TABLE>
WASHINGTON REAL ESTATE INVESTMENT TRUST
1999 FUNDS FROM OPERATIONS UP 12.6%
Washington Real Estate Investment Trust (WRIT) reported today that Funds From
Operations (FFO) increased 12.6% to $55,982,000 for the year ended December 31,
1999 from $49,699,000 for the year ended December 31, 1998. FFO per share
increased 12.9% to $1.57 in 1999 from $1.39 in 1998. FFO is the primary
performance measure for the REIT industry.
Edmund B. Cronin, Jr., President and CEO, stated that "WRIT's solid FFO growth
is due to the excellent performance of recent acquisitions, combined with the
strong core portfolio net operating income increase of 6.8% for the year 1999."
WRIT's core portfolio excludes properties not owned for the entirety of the
comparative periods.
WRIT's streak of 34 consecutive years of increased earnings per share and 27
consecutive years of increased FFO per share growth spans 4 recessions. WRIT's
dividends have increased every year for 29 consecutive years. During these 29
years, WRIT's dividends have increased 34 times, a record unmatched by any other
publicly traded real estate investment trust.
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 57 properties consisting of 12
retail centers, 21 office properties, 9 apartment properties and 15
industrial/flex properties.
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
<PAGE>
FOR IMMEDIATE RELEASE FEBRUARY 22, 2000
PAGE 2 OF 7
WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
QUARTER ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31,
OPERATING RESULTS 1999 1998 1999 1998
- ------------------------------------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Real estate rental revenue $ 32,891 $ 27,440 $ 118,975 $ 103,597
Real estate expenses (9,196) (7,884) (35,281) (31,114)
------------ ------------ ------------ ------------
23,695 19,556 83,694 72,483
Real estate depreciation and amortization (5,690) (4,127) (19,590) (15,399)
------------ ------------ ------------ ------------
INCOME FROM REAL ESTATE $ 18,005 $ 15,429 $ 64,104 $ 57,084
Other income 210 168 732 880
Interest expense (6,200) (4,622) (22,271) (17,106)
General and administrative (1,663) (1,895) (6,173) (6,558)
------------ ------------ ------------ ------------
INCOME BEFORE GAIN ON SALE OF REAL ESTATE $ 10,352 $ 9,080 $ 36,392 $ 34,300
------------ ------------ ------------ ------------
Gain on sale of real estate -- 838 7,909 6,764
NET INCOME $ 10,352 $ 9,918 $ 44,301 $ 41,064
============ ============ ============ ============
INCOME BEFORE GAIN ON REAL ESTATE PER SHARE
(BASIC) $ 0.29 $ 0.25 $ 1.02 $ 0.96
============ ============ ============ ============
INCOME BEFORE GAIN ON REAL ESTATE PER SHARE
(DILUTED) $ 0.29 $ 0.25 $ 1.02 $ 0.96
============ ============ ============ ============
NET INCOME PER SHARE (BASIC) $ 0.29 $ 0.28 $ 1.24 $ 1.15
============ ============ ============ ============
NET INCOME PER SHARE (DILUTED) $ 0.29 $ 0.28 $ 1.24 $ 1.15
============ ============ ============ ============
Income before gain on sale of real $ 10,352 $ 9,080 $ 36,392 $ 34,300
estate
Real estate depreciation and 5,690 4,127 19,590 15,399
amortization
------------ ------------ ------------ ------------
FUNDS FROM OPERATIONS $ 16,042 $ 13,207 $ 55,982 $ 49,699
============ ============ ============ ============
FUNDS FROM OPERATIONS PER SHARE (BASIC) $ .045 $ 0.37 $ 1.57 $ 1.39
============ ============ ============ ============
FUNDS FROM OPERATIONS PER SHARE
(DILUTED) $ 0.45 $ 0.37 $ 1.57 $ 1.39
============ ============ ============ ============
DIVIDENDS PAID PER SHARE $ 0.2925 $ 0.28 $ 1.1575 $ 1.11
============ ============ ============ ============
Weighted average shares outstanding 35,721,494 35,692,042 35,713,945 35,688,334
Fully diluted weighted average shares 35,722,991 35,723,685 35,722,602 35,714,470
outstanding
</TABLE>
AS OF AS OF
BALANCE SHEET DATA DEC. 31, 1999 DEC. 31, 1998
- ------------------ ------------------ -------------------
Cash and temporary investments $4,716 $4,595
Real estate assets, at cost (1) 661,870 598,874
Total assets, at cost (1) 692,054 627,008
Lines of credit payable 33,000 44,000
Mortgage note payable 87,038 28,913
Notes payable 210,000 210,000
Total liabilities 349,769 303,447
Shareholders' equity 257,189 253,733
Shareholders' equity, at cost (1) 340,763 322,034
(1) At cost means adding back accumulated depreciation.
<PAGE>
WASHINGTON REAL ESTATE INVESTMENT TRUST
Q4 1999 SUPPLEMENTAL DISCLOSURES
PAGE 3 OF 7
FFO PER SHARE GROWTH AVERAGES 24% > INDUSTRY AVERAGE OVER LAST 5 QUARTERS
As reflected in the following graph WRIT's FFO per share growth, as compared to
the corresponding quarter in the preceding calendar year, continues to
significantly outperform the industry.
[COMPARISON BAR GRAPH APPEARS HERE WITH THE FOLLOWING PLOT POINTS]
<TABLE>
<CAPTION>
Q4 1998 Q1 1999 Q2 1999 Q3 1999 Q4 1999 Average
<S> <C> <C> <C> <C> <C> <C>
WRIT 13.7% 5.9% 11.7% 11.8% 13.6% 11.3%
REIT Industry* 11.1% 8.9% 8.3% 7.8% 9.5% 9.1%
</TABLE>
*REIT Industry data for Q4 1998 - Q3 1999 is actual FFO per share growth per DLJ
Equity REIT Research. Estimate for REIT Industry Q4 1999 FFO Per Share growth is
per PaineWebber Incorporated.
**WRIT growth is shown excluding accounting change to straight-line rents.
CORE PORTFOLIO OPERATING INCOME (NOI) GROWTH, RENTAL RATE GROWTH, NET REVENUE
GROWTH INCREASE BY SECTOR - Q4 1999 VS. Q4 1998
<TABLE>
<CAPTION>
OPERATING
RENTAL RATE NET REVENUE EXPENSE
SECTOR NOI GROWTH GROWTH GROWTH INCREASE (DECREASE)
------ ---------- ------ ------ -------------------
<S> <C> <C> <C> <C>
Apartments 9.7% 3.7% 6.4% -2.5%
Office Buildings 8.6% 7.4% 6.2% 1.2%
Retail Centers 3.2% 2.5% 2.5% -4.5%
Industrial/Flex Centers 5.7% 4.5% 7.5% 3.0%
---- ---- ---- ----
OVERALL CORE PORTFOLIO 7.4% 5.4% 5.8% -0.3%
</TABLE>
CONTINUED
<PAGE>
WASHINGTON REAL ESTATE INVESTMENT TRUST
Q4 1999 SUPPLEMENTAL DISCLOSURES
PAGE 4 OF 7
CORE PORTFOLIO & OVERALL OCCUPANCY LEVELS BY SECTOR
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<TABLE>
<CAPTION>
CORE PORTFOLIO ALL PROPERTIES
--------------------------------------------------------------------------
4TH QTR 4TH QTR 4TH QTR 4TH QTR
SECTOR 1999 1998 1999 1998
- ------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
Apartments 97.6% 94.9% 97.2% 95.2%
Office Buildings 96.5% 97.7% 96.7% 97.7%
Retail Centers 95.2% 95.2% 93.5% 93.9%
Industrial/Flex Centers 93.5% 90.5% 94.6% 91.9%
----- ----- ----- -----
OVERALL PORTFOLIO 96.3% 95.9% 96.1% 95.8%
</TABLE>
CORE PORTFOLIO NOI GROWTH HAS AVERAGED 44% > INDUSTRY OVER LAST 5 QUARTERS
- --------------------------------------------------------------------------
As reflected in the following graph WRIT's core portfolio NOI growth, as
compared to the corresponding quarter in the preceding calendar year, continues
to significantly outperform the industry.
[COMPARISON BAR GRAPH APPEARS HERE WITH THE FOLLOWING PLOT POINTS]
<TABLE>
<CAPTION>
Q4 1998 Q1 1999 Q2 1999 Q3 1999 Q4 1999 Average
<S> <C> <C> <C> <C> <C> <C>
WRIT 12.0% 4.3% 8.6% 6.8% 7.4% 7.8%
REIT Industry* 5.4% 5.5% 5.3% 5.4% N/A 5.4%
</TABLE>
*REIT Industry Same Store NOI growth data is per PaineWebber Incorporated.
Q4 1999 Industry data is not yet available.
**WRIT growth is shown excluding accounting change to straight-line rents.
4TH QUARTER CAPITAL IMPROVEMENTS SUMMARY
During Q4 1999, WRIT invested $3.5 million in real estate capital improvements.
A breakdown of these improvements is as follows (in 000's):
Accretive Capital Improvements
Acquisition Related $1,706
Expansions & Major Renovations 142
Tenant Improvements 714
-------
Total Accretive Capital Improvements 2,562
Recurring Capital Improvements 972
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Total Capital Improvements $3,534
CONTINUED
<PAGE>
WASHINGTON REAL ESTATE INVESTMENT TRUST
Q4 1999 SUPPLEMENTAL DISCLOSURES
PAGE 5 OF 7
Q4 1999 COMMERCIAL LEASING ACTIVITY - 495,000 SF LEASED AT AVG. 11.9% RENT
INCREASE
In Q4 1999, WRIT executed leases for 495,000 square feet of commercial space at
a weighted average increase of 11.9% over the prior rent in place on a cash,
i.e., non-straight lined basis. Details by sector are as follows:
------------------------
<TABLE>
<CAPTION>
PREVIOUS NEW
SECTOR SQUARE FEET FACE RENT FACE RENT $ INCREASE % INCREASE
- ------ ----------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Office 302,880 $20.25 $ 23.27 $ 3.02 14.9%
Retail 66,748 22.90 23.82 .92 4.0%
Industrial/Flex 124,990 6.05 6.21 .16 2.7%
------- ---- ---- --- -----
OVERALL 494,618 $17.02 $19.04 $ 2.02 11.9%
AVG TERM AVERAGE
SECTOR (YEARS) TENANT IMP./SF
- ------ ------- --------------
Office 3.6 $3.75
Retail 3.9 .07
Industrial/Flex 2.8 1.06
--- ----
OVERALL 3.4 $2.57
</TABLE>
1999 COMMERCIAL LEASING ACTIVITY - 1.3 MILLION SF LEASED AT AVG. 15.4% RENT
INCREASE
In 1999, WRIT executed leases for 1,299,000 square feet of commercial space at a
weighted average increase of 15.4% over the prior rent in place on a cash, i.e.,
non-straight lined basis. Details by sector are as follows:
- ------------------------
<TABLE>
<CAPTION>
PREVIOUS NEW
SECTOR SQUARE FEET FACE RENT FACE RENT $ INCREASE % INCREASE
- ------ ----------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Office 645,373 $ 19.60 $ 23.10 $ 3.50 17.9%
Retail 207,324 15.07 16.74 1.67 11.1%
Industrial/Flex 446,121 5.53 6.03 .50 9.0%
------- ---- ---- --- ----
OVERALL 1,298,818 $ 14.05 $ 16.22 $ 2.17 15.4%
AVG TERM AVERAGE
SECTOR (YEARS) TENANT IMP./SF
------- --------------
Office 3.8 $4.58
Retail 5.1 .69
Industrial/Flex 3.3 .54
--- ---
OVERALL 3.8 $2.57
</TABLE>
CONTINUED
<PAGE>
WASHINGTON REAL ESTATE INVESTMENT TRUST
Q4 1999 SUPPLEMENTAL DISCLOSURES
PAGE 6 OF 7
NORTHERN VIRGINIA INDUSTRIAL PARK UPDATE
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On May 22, 1998 WRIT acquired the 790,000 square foot Northern Virginia
Industrial Park (NVIP). At acquisition, the property was 83% leased at an
average per square foot rent of $4.25 NNN. Upon acquisition, WRIT reported 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 December 31, 1999, i.e., in the 19 months since acquisition, WRIT has
executed leases for 372,000 square feet at a weighted average $5.23 NNN psf.
This average rent is 23% above the average rent in the park at acquisition.
As of the date hereof, NVIP is over 91% leased and WRIT anticipates lease
transactions currently under negotiation will result in NVIP being over 95%
leased by March, 2000.
Q4 1999 ACQUISITIONS
- --------------------
PARKLAWN PLAZA OFFICE BUILDING - a 40,000 square foot office building in
Rockville, Maryland was acquired for $4.68 million, cash on November 30, 1999.
The four-story building was 100% leased at acquisition. At a purchase price of
$118 per square foot, Parklawn Plaza was acquired at a substantial discount to
replacement cost.
Parklawn Plaza is anticipated to produce a first year cash return on investment
(ROI) of 10.6%. This first year ROI is anticipated to grow by over 6% per year
over the following two years as leases for approximately 18% of the square
footage in the property will expire by 12/31/2001 at rents averaging more than
18% below current market rents.
Parklawn Plaza is located directly across Parklawn Drive from WRIT's Saratoga,
Lexington and Brandywine office buildings as well as WRIT's Charleston Business
Center, an industrial/flex property. WRIT's total presence in the Parklawn Drive
submarket is over 250,000 square feet. This strong market position will give
WRIT significant synergistic leasing opportunities to accommodate the changing
needs of the more than 70 tenants in these properties.
CONTINUED
<PAGE>
WASHINGTON REAL ESTATE INVESTMENT TRUST
Q4 1999 SUPPLEMENTAL DISCLOSURES
PAGE 7 OF 7
12/31/99 DEBT SUMMARY
At December 31, 1999, WRIT's debt was as follows (in $millions):
Average Average
Amount Maturity (Yrs) Interest Rate
------ -------------- -------------
Secured $ 87.0 7.8 7.5%
Senior Notes & MTNs $ 210.0 11.5 7.2%
--------------------------------------------------
Subtotal $ 297.0 10.4 7.3%
Lines of Credit $ 33.0 2.3 6.5%
---------------------------------------------------
Total Debt $ 330.0 9.6 7.2%
*WRIT's Lines of Credit total $75 million of capacity at LIBOR+ 70bp.
No more than $60 million of debt matures in any one year and less than $1
million matures in each year until 2003.
END
