SEC Filing Summary: Washington Real Estate Investment Trust (WRIT)
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended September 30, 2001, for Washington Real Estate Investment Trust (WRIT), a Maryland REIT. The Trust operates income-producing real estate properties in the Washington-Baltimore region across four segments: Office Buildings, Industrial Centers, Multifamily Properties, and Retail Centers. As of the reporting date, the Trust had 38,697,250 shares of beneficial interest outstanding.
Key Financial Metrics
| Metric | Q3 2001 | Q3 2000 | 9 Months 2001 | 9 Months 2000 |
|---|---|---|---|---|
| Real Estate Rental Revenue | $37.9 million | $34.2 million | $110.6 million | $99.5 million |
| Operating Income | $27.1 million | $24.6 million | $78.8 million | $70.8 million |
| Net Income | $16.8 million | $12.8 million | $39.9 million | $33.6 million |
| Diluted EPS | $0.43 | $0.36 | $1.06 | $0.94 |
| Cash Flow from Operations (9M) | N/A | $51.5 million | $42.0 million | |
| Total Debt Outstanding | N/A | $350.6 million | N/A | |
| Cash and Equivalents | N/A | $33.0 million | $6.4 million (Dec 2000) |
Debt Structure: Total debt includes $85.6 million in mortgage notes and $265.0 million in unsecured notes payable. The Trust maintains $75 million in unsecured lines of credit with $0 outstanding as of September 30, 2001.
Material Changes vs. Prior Period
- Revenue Growth: Rental revenue increased 10.6% in Q3 2001 and 11.2% for the nine-month period compared to 2000. Growth was driven by acquisitions (including One Central Plaza in April 2001) and increased rental rates in the core portfolio.
- Segment Performance: Office buildings saw the strongest growth (17.7% revenue increase in Q3). Industrial centers saw a slight revenue decline (3.1%) despite improved occupancy, while Multifamily and Retail segments posted moderate gains.
- Expense Management: General and administrative expenses decreased significantly (31.9% in Q3) due to increased property management profits and reduced incentive compensation. Real estate expenses rose 11.8% in Q3, primarily due to the larger portfolio size.
- Asset Disposition: The Trust sold the 10400 Connecticut Avenue office building in September 2001 for $8.4 million, recognizing a gain of approximately $4.3 million.
Guidance, Outlook, and Risks
Capital Resources: Management anticipates sufficient liquidity to meet obligations and fund future acquisitions. The Trust raised $53.1 million through a share offering in the first nine months of 2001. No debt is currently at a floating rate, mitigating immediate interest rate risk.
Subsequent Event: On November 1, 2001, WRIT acquired the Sullyfield Commerce Center for $21.6 million (cash subject to an $8.5 million mortgage assumption).
Risks: Forward-looking statements are subject to risks including the economic health of the Washington-Baltimore region, tenant financial stability, supply of competing properties, and interest rate fluctuations. The filing notes no material legal proceedings or defaults on senior securities.
Investor Verification Checklist
- Acquisition Integration: Verify the occupancy and rental rate performance of the One Central Plaza acquisition (April 2001) and the Sullyfield Commerce Center (November 2001).
- Debt Maturities: Review the schedule for the $55 million unsecured notes due in November 2004 and the $50 million notes due in August 2003 to assess refinancing needs.
- Dividend Sustainability: Confirm that cash flow from operations ($51.5 million for 9 months) continues to cover the dividend payout rate ($0.9775 per share for 9 months).
- Office Sector Exposure: Assess the impact of the 56% revenue concentration in Office Buildings against regional economic conditions.