10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________

FORM 10-Q

___________________________________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended September 30, 2014

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

COMMISSION FILE NO. 1-6622

WASHINGTON REAL ESTATE

INVESTMENT TRUST

(Exact name of registrant as specified in its charter)

MARYLAND	53-0261100
(State of incorporation)	(IRS Employer Identification Number)

6110 EXECUTIVE BOULEVARD, SUITE 800, ROCKVILLE, MARYLAND 20852

(Address of principal executive office) (Zip code)

Registrant’s telephone number, including area code: (301) 984-9400

___________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of exchange on which registered
Shares of Beneficial Interest	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

___________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past ninety (90) days.    YES x   NO  o

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  x      NO  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    YES  o    NO  x

As of October 28, 2014, 66,661,627 common shares were outstanding.

WASHINGTON REAL ESTATE INVESTMENT TRUST

INDEX

		Page
Part I: Financial Information
Item 1.	Consolidated Financial Statements (Unaudited)
	Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Income	5
	Consolidated Statement of Shareholders' Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	36
Item 4.	Controls and Procedures	36
Part II: Other Information
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
	Signatures	39

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PART I

FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

The information furnished in the accompanying unaudited Consolidated Balance Sheets, Condensed Consolidated Statements of Income, Consolidated Statement of Shareholders' Equity and Consolidated Statements of Cash Flows reflects all adjustments, consisting of normal recurring items, which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods. The accompanying financial statements and notes thereto should be read in conjunction with the financial statements and notes for the three years ended December 31, 2013 included in Washington Real Estate Investment Trust’s 2013 Annual Report on Form 10-K.

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WASHINGTON REAL ESTATE INVESTMENT TRUST AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	September 30, 2014			December 31, 2013
	(Unaudited)
Assets
Land	$	519,859		$	426,575
Income producing property	1,867,752			1,675,652
	2,387,611			2,102,227
Accumulated depreciation and amortization	(620,279		)	(565,342		)
Net income producing property	1,767,332			1,536,885
Properties under development or held for future development	99,500			61,315
Total real estate held for investment, net	1,866,832			1,598,200
Investment in real estate sold or held for sale, net	—			79,901
Cash and cash equivalents	8,571			130,343
Restricted cash	9,496			9,189
Rents and other receivables, net of allowance for doubtful accounts of $5,519 and $6,783, respectively	58,135			48,756
Prepaid expenses and other assets	116,345			105,004
Other assets related to properties sold or held for sale	—			4,100
Total assets	$	2,059,379		$	1,975,493
Liabilities
Notes payable	$	747,082		$	846,703
Mortgage notes payable	413,330			294,671
Lines of credit	5,000			—
Accounts payable and other liabilities	64,153			51,742
Advance rents	12,211			13,529
Tenant security deposits	8,625			7,869
Liabilities related to properties sold or held for sale	—			1,533
Total liabilities	1,250,401			1,216,047
Equity
Shareholders’ equity
Preferred shares; $0.01 par value; 10,000 shares authorized; no shares issued or outstanding	—			—
Shares of beneficial interest; $0.01 par value; 100,000 shares authorized: 66,663 and 66,531 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively	667			665
Additional paid in capital	1,153,344			1,151,174
Distributions in excess of net income	(347,724		)	(396,880		)
Total shareholders’ equity	806,287			754,959
Noncontrolling interests in subsidiaries	2,691			4,487
Total equity	808,978			759,446
Total liabilities and equity	$	2,059,379		$	1,975,493

See accompanying notes to the consolidated financial statements.

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WASHINGTON REAL ESTATE INVESTMENT TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Revenue
Real estate rental revenue	$	73,413		$	65,828		$	214,278		$	196,303
Expenses
Real estate expenses	25,914			23,243			77,784			69,467
Depreciation and amortization	24,354			21,168			71,508			63,328
Acquisition costs	69			148			5,047			448
General and administrative	4,523			3,850			13,780			11,717
	54,860			48,409			168,119			144,960
Other operating income
Gain on sale of real estate	—			—			570			—
Real estate operating income	18,553			17,419			46,729			51,343
Other income (expense)
Interest expense	(15,087		)	(15,930		)	(44,602		)	(47,944		)
Other income	192			220			634			705
	(14,895		)	(15,710		)	(43,968		)	(47,239		)
Income from continuing operations	3,658			1,709			2,761			4,104
Discontinued operations:
Income from operations of properties sold or held for sale	—			4,131			546			11,139
Gain on sale of real estate	—			—			105,985			3,195
Net income	3,658			5,840			109,292			18,438
Less: Net loss attributable to noncontrolling interests in subsidiaries	10			—			17			—
Net income attributable to the controlling interests	$	3,668		$	5,840		$	109,309		$	18,438
Basic net income per share:
Continuing operations	$	0.05		$	0.03		$	0.04		$	0.06
Discontinued operations	—			0.06			1.59			0.21
Net income per share	$	0.05		$	0.09		$	1.63		$	0.27
Diluted net income per share:
Continuing operations	$	0.05		$	0.03		$	0.04		$	0.06
Discontinued operations	—			0.06			1.59			0.21
Net income per share	$	0.05		$	0.09		$	1.63		$	0.27
Weighted average shares outstanding – basic	66,738			66,410			66,725			66,403
Weighted average shares outstanding – diluted	66,790			66,561			66,760			66,545
Dividends declared per share	$	0.3000		$	0.3000		$	0.9000		$	0.9000

See accompanying notes to the consolidated financial statements.

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WASHINGTON REAL ESTATE INVESTMENT TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

(IN THOUSANDS)

(UNAUDITED)

	Shares Outstanding	Shares of Beneficial Interest at Par Value		Additional Paid in Capital		Distributions in Excess of Net Income Attributable to the Controlling Interests			Total Shareholders’ Equity			Noncontrolling Interests in Subsidiaries			Total Equity
Balance, December 31, 2013	66,531	$	665	$	1,151,174	$	(396,880	)	$	754,959		$	4,487		$	759,446
Net income attributable to the controlling interests	—	—		—		109,309			109,309			—			109,309
Net loss attributable to the noncontrolling interests	—	—		—		—			—			(17		)	(17		)
Distributions to noncontrolling interests	—	—		—		—			—			(1,784		)	(1,784		)
Contributions from noncontrolling interests	—	—		—		—			—			5			5
Dividends	—	—		—		(60,153		)	(60,153		)	—			(60,153		)
Share grants, net of share grant amortization and forfeitures	132	2		2,170		—			2,172			—			2,172
Balance, September 30, 2014	66,663	$	667	$	1,153,344	$	(347,724	)	$	806,287		$	2,691		$	808,978

See accompanying notes to the consolidated financial statements.

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WASHINGTON REAL ESTATE INVESTMENT TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

	Nine Months Ended September 30,
	2014			2013
Cash flows from operating activities
Net income	$	109,292		$	18,438
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including amounts in discontinued operations	71,508			75,489
Provision for losses on accounts receivable	1,335			3,012
Gain on sale of real estate	(106,555		)	(3,195		)
Amortization of share grants, net	3,835			3,615
Amortization of debt premiums, discounts and related financing costs	2,730			2,980
Changes in operating other assets	(16,255		)	(8,856		)
Changes in operating other liabilities	(3,013		)	2,002
Net cash provided by operating activities	62,877			93,485
Cash flows from investing activities
Real estate acquisitions, net	(154,126		)	—
Net cash received for sale of real estate	190,864			15,161
Capital improvements to real estate	(41,945		)	(39,348		)
Development in progress	(28,363		)	(9,385		)
Real estate deposits, net	(2,500		)	(6,800		)
Cash held in replacement reserve escrows	(550		)	—
Non-real estate capital improvements	(44		)	(125		)
Net cash used in investing activities	(36,664		)	(40,497		)
Cash flows from financing activities
Line of credit borrowings, net	5,000			85,000
Dividends paid	(60,153		)	(60,132		)
Contributions from noncontrolling interests	5			390
Distributions to noncontrolling interests	(3,454		)	—
Payment of financing costs	(660		)	—
Principal payments – mortgage notes payable	(2,860		)	(32,461		)
Borrowings under construction loan	14,137			3,033
Notes payable repayments	(100,000		)	(60,000		)
Net cash used in financing activities	(147,985		)	(64,170		)
Net decrease in cash and cash equivalents	(121,772		)	(11,182		)
Cash and cash equivalents at beginning of period	130,343			19,105
Cash and cash equivalents at end of period	$	8,571		$	7,923
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	$	36,770		$	42,075
Cash paid for income taxes, net of refunds	156			—
Decrease in accrued capital improvements and development costs	10,860			2,978
Mortgage notes payable assumed in connection with the acquisition of real estate	100,861			—

See accompanying notes to the consolidated financial statements.

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WASHINGTON REAL ESTATE INVESTMENT TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2014

(UNAUDITED)

NOTE 1: NATURE OF BUSINESS

Washington Real Estate Investment Trust (“Washington REIT”), a Maryland real estate investment trust, is a self-administered, self-managed equity real estate investment trust, successor to a trust organized in 1960. Our business consists of the ownership and operation of income-producing real estate properties in the greater Washington metro region. We own a diversified portfolio of office buildings, multifamily buildings and retail centers.

Federal Income Taxes

We believe that we qualify as a real estate investment trust (“REIT”) under Sections 856-860 of the Internal Revenue Code and intend to continue to qualify as such. To maintain our status as a REIT, we are required to distribute 90% of our ordinary taxable income to our shareholders. When selling properties, we have the option of (a) reinvesting the sales proceeds of properties sold, allowing for a deferral of income taxes on the sale, (b) paying out capital gains to the shareholders with no tax to Washington REIT or (c) treating the capital gains as having been distributed to the shareholders, paying the tax on the gain deemed distributed and allocating the tax paid as a credit to the shareholders. During the first quarter of 2014, we closed on Transactions III (for the sale of Woodburn Medical Park I and II) and IV (for the sale of Prosperity Medical Center I, II and III) of the Medical Office Portfolio sale for an aggregate contract sales price of $193.6 million. We have reinvested a portion of the Medical Office Portfolio sales proceeds in replacement properties through deferred tax exchanges.

Generally, and subject to our ongoing qualification as a REIT, no provisions for income taxes are necessary except for taxes on undistributed REIT taxable income and taxes on the income generated by our taxable REIT subsidiaries (“TRSs”). Our TRSs are subject to corporate federal and state income tax on their taxable income at regular statutory rates or as calculated under the alternative minimum tax, as appropriate. There were no material income tax provisions or material net deferred income tax items for our TRSs for the three and nine months ended September 30, 2014 and 2013.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Significant Accounting Policies

We have prepared our consolidated financial statements using the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2013.

New Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the requirements for reporting discontinued operations. Specifically, under this ASU only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. The primary impact of this ASU is that we are no longer required to report the disposal of every operating property in discontinued operations. Adoption of this ASU is required for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after after December 15, 2014, and interim periods within those years. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. We early adopted this ASU effective for the first quarter of 2014.

In June 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which creates a single source of revenue guidance. The new standard provides accounting guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers (unless the contracts are in the scope of other U.S. generally accepted accounting principles (“GAAP”) requirements, such as the leasing literature). The guidance also provides a model for the measurement and recognition of gains and losses on the sale of certain nonfinancial assets, such as property and equipment, including real estate. The new standard is effective for public entities for fiscal years beginning after December 15, 2016 and for interim periods therein. Early adoption is not permitted for public entities. We are currently evaluating the impact the new standard may have on Washington REIT.

Principles of Consolidation and Basis of Presentation

The accompanying unaudited consolidated financial statements include the consolidated accounts of Washington REIT, our majority-owned subsidiaries and entities in which Washington REIT has a controlling interest, including where Washington REIT has been determined to be a primary beneficiary of a variable interest entity (“VIE”). See note 3 for additional information on the

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properties for which there is a noncontrolling interest. All intercompany balances and transactions have been eliminated in consolidation.

We have prepared the accompanying unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information presented not misleading. In addition, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for the periods presented have been included. These unaudited financial statements should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2013.

Within these notes to the financial statements, we refer to the three months ended September 30, 2014 and September 30, 2013 as the “2014 Quarter” and the “2013 Quarter,” respectively, and the nine months ended September 30, 2014 and September 30, 2013 as the “2014 Period” and the “2013 Period,” respectively.

Use of Estimates in the Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

NOTE 3: REAL ESTATE

Acquisitions

Washington REIT acquired the following properties during the 2014 Period:

			Rentable	Contract Purchase Price
Acquisition Date	Property Name	Type	Square Feet	(in thousands)
February 21, 2014	Yale West (216 units)	Multifamily	N/A	$	73,000
March 26, 2014	The Army Navy Club Building	Office	108,000	79,000
May 1, 2014	1775 Eye Street, NW	Office	185,000	104,500
			293,000	$	256,500

The results of operations from the acquired operating properties are included in the consolidated statements of income as of their acquisition dates.

The revenue and earnings of our 2014 acquisitions are as follows (amounts in thousands):

	Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014
Real estate rental revenue	$	5,089		$	10,444
Net loss	(640		)	(2,752		)

We record the acquired physical assets (land, building and tenant improvements), and in-place leases (absorption, tenant origination costs, leasing commissions and net lease intangible assets/liabilities), and any other assets or liabilities at their fair values.

9

We have recorded the total purchase price of the above acquisitions as follows (in thousands):

Land	$	93,567
Buildings	141,456
Tenant origination costs	8,354
Leasing commissions/absorption costs	12,847
Net lease intangible assets	7,331
Net lease intangible liabilities	(2,122		)
Fair value of assumed mortgages	(107,125		)
Furniture fixtures and equipment	932
Total	$	155,240

The weighted remaining average life for the 2014 acquisition components above, other than land and building, are 71 months for tenant origination costs, 54 months for leasing commissions/absorption costs, 72 months for net lease intangible assets and 82 months for net lease intangible liabilities.

The difference in the total contract purchase price of $256.5 million for the 2014 acquisitions and the acquisition cost per the consolidated statement of cash flows of $154.1 million is primarily due to the assumption of two mortgage notes secured by Yale West and The Army Navy Club Building for an aggregate $100.9 million and the payment of a $3.6 million deposit for Yale West in 2013, partially offset by a credit to the seller for building renovations at 1775 Eye Street, NW for $1.9 million.

The following unaudited pro-forma combined condensed statements of operations are for the 2014 and 2013 Quarters and Periods as if the above described acquisitions had occurred at the beginning of the period of acquisition and the same period in the year prior to acquisition. The unaudited pro-forma information does not purport to be indicative of the results that actually would have occurred if the acquisitions had been in effect for the 2014 and 2013 Quarters and Periods. The unaudited data presented is in thousands, except per share data.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Real estate rental revenue	$	73,413	$	71,004	$	219,192	$	211,662
Income from continuing operations	3,668		477		1,960		449
Net income	3,668		4,608		108,492		14,783
Diluted earnings per share	0.05		0.07		1.62		0.22

Redevelopment

In the office segment, we have an active redevelopment project to renovate 7900 Westpark Drive. Our total investment in the renovation at 7900 Westpark Drive is expected to be $35.0 million. As of September 30, 2014 and December 31, 2013, we had invested $18.4 million and $3.6 million, respectively, in the renovation. We anticipate completion during the first quarter of 2015.

Variable Interest Entities

In June 2011, we executed a joint venture operating agreement with a real estate development company to develop The Maxwell, a mid-rise multifamily property at 650 North Glebe Road in Arlington, Virginia. We estimate the total cost of the project to be $49.9 million. During the first quarter of 2013, we secured third-party debt financing for approximately 70% of the project's cost. Washington REIT is the 90% owner of the joint venture and will have management and leasing responsibilities when the project is completed and stabilized (defined as 90% of the residential units leased). The real estate development company owns 10% of the joint venture and is responsible for the development and construction of the property. The joint venture currently expects to complete this development project during the fourth quarter of 2014.

In November 2011, we executed a joint venture operating agreement with a real estate development company to develop a high-rise multifamily property at 1225 First Street (formerly 1219 First Street) in Alexandria, Virginia. We estimate the total cost of the project to be $95.3 million, with approximately 70% of the project financed with debt. Washington REIT is the 95% owner of the joint venture and will have management and leasing responsibilities if the project is completed and stabilized. The real estate development company owns 5% of the joint venture and is responsible for the development and construction of the property. In

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the first quarter of 2013, we decided to delay commencement of construction due to market conditions and concerns of oversupply. We continue to reassess this project on a periodic basis going forward.

We have determined that The Maxwell and 1225 First Street joint ventures are VIE's primarily based on the fact that the equity investment at risk is not sufficient to permit either entity to finance its activities without additional financial support. We expect that 70% of the total development costs for each project would be financed through debt. We have also determined that Washington REIT is the primary beneficiary of each VIE due to the fact that Washington REIT is providing 90%to 95%of the equity contributions and will manage each property after stabilization.

We include the joint venture land acquisitions on our consolidated balance sheets in properties under development or held for future development. As of September 30, 2014 and December 31, 2013, the land and capitalized development costs are as follows (in thousands):

	September 30, 2014		December 31, 2013
The Maxwell	$	47,084	$	27,343
1225 First Street	20,807		20,788

As of September 30, 2014 and December 31, 2013, the accounts payable and accrued liabilities related to the joint ventures are as follows (in thousands):

	September 30, 2014		December 31, 2013
The Maxwell	$	6,253	$	1,785
1225 First Street	76		39

On February 21, 2013, Washington REIT, through its consolidated joint venture to develop The Maxwell, entered into a construction loan agreement with Citizens Bank for $33.0 million. The loan bears interest at LIBOR plus 2.15%, which decreases to LIBOR plus 2.0% upon completion of construction and the joint venture not being in default. The loan matures on February 21, 2016, with twoone year extension options exercisable by the joint venture, subject to fees and compliance with certain provisions in the loan agreement. As of September 30, 2014 and December 31, 2013, the consolidated joint venture had $21.4 million and $7.3 million, respectively, outstanding on this construction loan agreement.

Discontinued Operations

We dispose of assets that no longer meet our long-term strategy or return objectives and where market conditions for sale are favorable. The proceeds from the sales may be reinvested into other properties, used to fund development operations or to support other corporate needs, or distributed to our shareholders. Properties are considered held for sale when they meet the criteria specified (see "Discontinued Operations" in note 2 of the consolidated financial statements included in Washington REIT's Annual Report on Form 10-K for the year ended December 31, 2013). Depreciation on these properties is discontinued at that time, but operating revenues, other operating expenses and interest continue to be recognized until the date of sale.

In September 2013, we entered into four separate purchase and sale agreements to effectuate the sale of our entire medical office segment (including land held for development at 4661 Kenmore Avenue) and two office buildings (Woodholme Center and 6565 Arlington Boulevard) for an aggregate purchase price of $500.8 million. The sale was structured as four transactions. Transactions I and II closed in November 2013 and Transactions III and IV closed in January 2014.

The results of our medical office segment are summarized as follows (amounts in thousands, except per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Real estate rental revenue	$	—	$	10,889	$	892	$	32,928
Net income	—		3,820		546		10,080
Basic net income per share	—		0.06		0.01		0.15
Diluted net income per share	—		0.06		0.01		0.15

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We sold the following properties in 2014 and 2013:

Property Name	Segment	Rentable Square Feet	Contract Purchase  Price (in thousands)		Gain on Sale (in thousands)
Medical Office Portfolio Transactions III & IV (1)	Medical Office	427,000	$	193,561	$	105,985
5740 Columbia Road (2)	Retail	3,000	1,600		570
	Total 2014	430,000	$	195,161	$	106,555
Atrium Building	Office	79,000	$	15,750	$	3,195
Medical Office Portfolio Transactions I & II (3)	Medical Office / Office	1,093,000	307,189		18,949
	Total 2013	1,172,000	$	322,939	$	22,144

⁽¹⁾  Woodburn Medical Park I and II and Prosperity Medical Center I, II and III.

⁽²⁾ This property is classified as continuing operations in accordance with ASU No. 2014-08 (see note 2).

⁽³⁾  2440 M Street, 15001 Shady Grove Road, 15505 Shady Grove Road, 19500 at Riverside Park (formerly Lansdowne Medical Office Building), 9707 Medical Center Drive, CentreMed I and II, 8301 Arlington Boulevard, Sterling Medical Office Building, Shady Grove Medical Village II, Alexandria Professional Center, Ashburn Farm Office Park I, Ashburn Farm Office Park II, Ashburn Farm Office Park III, Woodholme Medical Office Building, two office properties (6565 Arlington Boulevard and Woodholme Center) and undeveloped land at 4661 Kenmore Avenue.

As of September 30, 2014 and December 31, 2013, investment in real estate for properties sold or held for sale, all of which were in the medical office segment, was as follows (in thousands):

	September 30, 2014		December 31, 2013
Investment in real estate sold or held for sale	$	—	$	125,967
Less accumulated depreciation	—		(46,066		)
Investment in real estate sold or held for sale, net	$	—	$	79,901

Income from operations of properties sold or held for sale for the three and nine months ended September 30, 2014 and 2013 was as follows (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014			2013
Real estate rental revenue	$	—	$	12,073		$	892		$	37,141
Real estate expenses	—		(4,398		)	(346		)	(12,856		)
Depreciation and amortization	—		(3,215		)	—			(12,161		)
Interest expense	—		(329		)	—			(985		)
Income from operations of properties sold or held for sale	$	—	$	4,131		$	546		$	11,139

Income from operations of properties sold or held for sale by property for the three and nine months ended September 30, 2014 and 2013 was as follows (in thousands):

		Three Months Ended September 30,				Nine Months Ended September 30,
Property	Segment	2014		2013		2014		2013
Atrium Building	Office	$	—	$	—	$	—	$	185
Medical Office Portfolio	Medical Office / Office	—		4,131		546		10,954
		$	—	$	4,131	$	546	$	11,139

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NOTE 4: MORTGAGE NOTES PAYABLE

In February 2014, we assumed a $48.2 million mortgage note as partial consideration for the acquisition of Yale West. This mortgage note bears interest at 5.55% per annum. The fair value interest rate on this mortgage note is 3.75% based on quotes obtained for similar loans. We recorded the mortgage note at its estimated fair value of $54.0 million. Principal and interest are payable monthly until January 1, 2052, at which time all unpaid principal and interest are payable in full. The loan may be prepaid, without penalty, on January 31, 2022 or thereafter on the last business day of the month until maturity, with thirty days prior written notice to the lender.

In March 2014, we assumed a $52.7 million mortgage note as partial consideration for acquisition of The Army Navy Club Building. This mortgage note bears interest at 3.45% per annum. The fair value interest rate on this mortgage note is 3.18% based on quotes obtained for similar loans. We recorded the mortgage at its estimated fair value of $53.2 million. Principal and interest are payable monthly until May 1, 2017, at which time all unpaid principal and interest are payable in full.

NOTE 5: UNSECURED LINES OF CREDIT PAYABLE

As of September 30,2014, we maintained a $100.0 million unsecured line of credit maturing in June 2015 ("Credit Facility No. 1") and a $400.0 million unsecured line of credit maturing in July 2016 ("Credit Facility No. 2"). Credit Facilities No. 1 and No. 2 have accordion features that allow us to increase the facilities to $200.0 million and $600.0 million, respectively, subject to additional lender commitments.

The amounts of these lines of credit unused and available at September 30, 2014 are as follows (in thousands):

	Credit Facility No. 1			Credit Facility No. 2
Committed capacity	$	100,000		$	400,000
Borrowings outstanding	(5,000		)	—
Unused and available	$	95,000		$	400,000

We executed borrowings on the unsecured lines of credit during the 2014 Period as follows (in thousands):

	Credit Facility No. 1
Balance at December 31, 2013	$	—
Borrowings	5,000
Balance at September 30, 2014	$	5,000

NOTE 6: NOTES PAYABLE

We repaid without penalty $100.0 million of our 5.25% unsecured notes on their due date of January 15, 2014, using proceeds from the sale of the Medical Office Portfolio.

NOTE 7: STOCK BASED COMPENSATION

Washington REIT maintains short-term ("STIP") and long-term ("LTIP") incentive plans that allow for stock-based awards to officers and non-officer employees. Stock based awards are provided to officers and non-officer employees, as well as trustees, under the Washington Real Estate Investment Trust 2007 Omnibus Long-Term Incentive Plan which allows for awards in the form of restricted shares, restricted share units, options and other awards up to an aggregate of 2,000,000 shares over the ten year period in which the plan will be in effect. Restricted share units are converted into shares of our stock upon full vesting through the issuance of new shares.

During the 2014 Period, the Board of Trustees adopted a new STIP and new LTIP for executive officers. Regarding the new STIP, the changes from the prior STIP primarily removed the 15% service-only component of the award, maintaining an award payable 50% in cash and 50% in stock. The new LTIP is based entirely on total shareholder return during a defined three-year period. The LTIP was also converted from a single three-year plan structure to a “rolling” structure in which a new three-year plan is commenced each year. The vesting at the end of the performance period was modified to be 75% at the end of the performance period and 25% one year thereafter. In addition, during the transition period to the new LTIP, the Board of Trustees awarded similar transition awards with defined performance periods of one and two years and modified vesting to account for the transition.

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Total Compensation Expense

Total compensation expense recognized in the consolidated financial statements for all outstanding share based awards was $1.3 million and $1.2 million for the 2014 and 2013 Quarters, respectively, and $3.8 million and $3.6 million for the 2014 and 2013 Periods, respectively.

Restricted Share Awards

The total fair values of restricted share awards vested was $1.0 million and $0.7 million for the 2014 and 2013 Periods, respectively.

The total unvested restricted share awards at September 30, 2014 was 207,082 shares, which had a weighted average grant date fair value of $25.37 per share. As of September 30, 2014, the total compensation cost related to unvested restricted share awards was $1.7 million, which we expect to recognize over a weighted average period of 17 months.

NOTE 8: FAIR VALUE DISCLOSURES

Assets and Liabilities Measured at Fair Value

For assets and liabilities measured at fair value on a recurring basis, quantitative disclosures about the fair value measurements are required to be disclosed separately for each major category of assets and liabilities, as follows:

Level 1: Quoted prices in active markets for identical assets

Level 2: Significant other observable inputs

Level 3: Significant unobservable inputs

The only assets or liabilities we had at September 30, 2014 and December 31, 2013 that are recorded at fair value on a recurring basis are the assets held in the Supplemental Executive Retirement Program (“SERP”). We base the valuations related to this asset on the observable market values of the investments that comprise the SERP (Level 2 inputs).

The fair values of these assets at September 30, 2014 and December 31, 2013 were as follows (in thousands):

	September 30, 2014								December 31, 2013
	Fair Value		Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3
Assets:
SERP	$	2,616	$	—	$	2,616	$	—	$	3,290	$	—	$	3,290	$	—

Financial Assets and Liabilities Not Measured at Fair Value

The following disclosures of estimated fair value were determined by management using available market information and established valuation methodologies, including discounted cash flow. Many of these estimates involve significant judgment. The estimated fair value disclosed may not necessarily be indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have an effect on the estimated fair value amounts. In addition, fair value estimates are made at a point in time and thus, estimates of fair value subsequent to September 30, 2014 may differ significantly from the amounts presented.

Following is a summary of significant methodologies used in estimating fair values and a schedule of fair values at September 30, 2014.

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents and restricted cash include cash and commercial paper with original maturities of less than 90 days, which are valued at the carrying value, which approximates fair value due to the short maturity of these instruments (Level 1 inputs).

Notes Receivable

We acquired a note receivable ("2445 M Street note") in 2008 with the purchase of 2445 M Street. We estimate the fair value of the 2445 M Street note based on a discounted cash flow methodology using market discount rates (Level 3 inputs).

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Debt

Mortgage notes payable consist of instruments in which certain of our real estate assets are used for collateral. We estimate the fair value of the mortgage notes payable by discounting the contractual cash flows at a rate equal to the relevant treasury rates (with respect to the timing of each cash flow) plus credit spreads estimated through independent comparisons to real estate assets or loans with similar characteristics. Lines of credit payable consist of bank facilities which we use for various purposes including working capital, acquisition funding or capital improvements. The lines of credit advances are priced at a specified rate plus a spread. We estimate the market value based on a comparison of the spreads of the advances to market given the adjustable base rate. We estimate the fair value of the notes payable by discounting the contractual cash flows at a rate equal to the relevant treasury rates (with respect to the timing of each cash flow) plus credit spreads derived using the relevant securities’ market prices. We classify these fair value measurements as Level 3 as we use significant unobservable inputs and management judgment due to the absence of quoted market prices.

As of September 30, 2014 and December 31, 2013, the carrying values and estimated fair values of our financial instruments were as follows (in thousands):

	September 30, 2014				December 31, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash and cash equivalents	$	8,571	$	8,571	$	130,343	$	130,343
Restricted cash	9,496		9,496		9,189		9,189
2445 M Street note	5,556		6,755		6,070		6,803
Mortgage notes payable	413,330		429,957		294,671		313,476
Lines of credit	5,000		5,000		—		—
Notes payable	747,082		782,450		846,703		856,171

NOTE 9: EARNINGS PER COMMON SHARE

We determine “Basic earnings per share” using the two-class method as our unvested restricted share awards and units have non-forfeitable rights to dividends and are therefore considered participating securities. We compute basic earnings per share by dividing net income attributable to the controlling interest less the allocation of earnings to unvested restricted share awards and units by the weighted-average number of common shares outstanding for the period.

We also determine “Diluted earnings per share” under the two-class method with respect to the unvested restricted share awards. We further evaluate any other potentially dilutive securities at the end of the period and adjust the basic earnings per share calculation for the impact of those securities that are dilutive. Our dilutive earnings per share calculation includes the dilutive impact of employee stock options based on the treasury stock method and our incentive share awards with performance or market conditions under the contingently issuable method. The diluted earnings per share calculation also considers operating partnership units (if any) under the if-converted method.

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The computations of basic and diluted earnings per share for the three and nine months ended September 30, 2014 and 2013 were as follows (in thousands, except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Numerator:
Income from continuing operations	$	3,658		$	1,709		$	2,761		$	4,104
Net loss attributable to noncontrolling interests	10			—			17			—
Allocation of earnings to unvested restricted share awards	(44		)	(32		)	11			(83		)
Adjusted income from continuing operations attributable to the controlling interests	3,624			1,677			2,789			4,021
Income from discontinued operations, including gain on sale of real estate, net of taxes	—			4,131			106,531			14,334
Allocation of earnings to unvested restricted share awards	—			(77		)	(335		)	(288		)
Adjusted income from discontinuing operations attributable to the controlling interests	—			4,054			106,196			14,046
Adjusted net income attributable to the controlling interests	$	3,624		$	5,731		$	108,985		$	18,067
Denominator:
Weighted average shares outstanding – basic	66,738			66,410			66,725			66,403
Effect of dilutive securities:
Operating partnership units	—			117			—			117
Employee stock options and restricted share awards	52			34			35			25
Weighted average shares outstanding – diluted	66,790			66,561			66,760			66,545
Earnings per common share, basic:
Continuing operations	$	0.05		$	0.03		$	0.04		$	0.06
Discontinued operations	—			0.06			1.59			0.21
	$	0.05		$	0.09		$	1.63		$	0.27
Earnings per common share, diluted:
Continuing operations	$	0.05		$	0.03		$	0.04		$	0.06
Discontinued operations	—			0.06			1.59			0.21
	$	0.05		$	0.09		$	1.63		$	0.27

NOTE 10: SEGMENT INFORMATION

We have three reportable segments: office, retail and multifamily. Office buildings provide office space for various types of businesses and professions. Retail shopping centers are typically grocery store anchored neighborhood centers that include other small shop tenants or regional power centers with several junior box tenants. Multifamily properties provide rental housing for individuals and families throughout the Washington metropolitan area. During the 2014 Period, we completed the sale of our medical office segment (see note 3).

We evaluate performance based upon operating income from the combined properties in each segment. Our reportable operating segments are consolidations of similar properties. GAAP requires that segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing segments’ performance. Net operating income is a key measurement of our segment profit and loss. Net operating income is defined as segment real estate rental revenue less segment real estate expenses.

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The following tables present revenues, net operating income, capital expenditures and total assets for the 2014 and 2013 Quarters and Periods from these segments, and reconciles net operating income of reportable segments to net income attributable to the controlling interests as reported (in thousands):

	Three Months Ended September 30, 2014
	Office		Retail		Multifamily		Corporate and Other		Consolidated
Real estate rental revenue	$	42,628	$	14,825	$	15,960	$	—	$	73,413
Real estate expenses	16,066		3,204		6,644		—		25,914
Net operating income	$	26,562	$	11,621	$	9,316	$	—	$	47,499
Depreciation and amortization									(24,354		)
General and administrative									(4,523		)
Acquisition costs									(69		)
Interest expense									(15,087		)
Other income									192
Net income									3,658
Less: Net loss attributable to noncontrolling interests in subsidiaries									10
Net income attributable to the controlling interests									$	3,668
Capital expenditures	$	7,804	$	3,037	$	2,157	$	3	$	13,001
Total assets	$	1,277,131	$	341,728	$	404,596	$	35,924	$	2,059,379

	Three Months Ended September 30, 2013
	Office		Medical Office		Retail		Multifamily		Corporate and Other		Consolidated
Real estate rental revenue	$	38,221	$	—	$	13,990	$	13,617	$	—	$	65,828
Real estate expenses	14,517		—		3,207		5,519		—		23,243
Net operating income	$	23,704	$	—	$	10,783	$	8,098	$	—	$	42,585
Depreciation and amortization											(21,168		)
Acquisition costs											(148		)
General and administrative											(3,850		)
Interest expense											(15,930		)
Other income											220
Discontinued operations:
Income from operations of properties sold or held for sale											4,131
Net income											5,840
Less: Net income attributable to noncontrolling interests in subsidiaries											—
Net income attributable to the controlling interests											$	5,840
Capital expenditures	$	9,535	$	505	$	198	$	4,041	$	16	$	14,295
Total assets	$	1,116,087	$	319,928	$	348,490	$	258,027	$	45,823	$	2,088,355

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	Nine Months Ended September 30, 2014
	Office		Retail		Multifamily		Corporate and Other		Consolidated
Real estate rental revenue	$	123,568	$	44,209	$	46,501	—		$	214,278
Real estate expenses	47,579		10,672		19,533		—		77,784
Net operating income	$	75,989	$	33,537	$	26,968	—		$	136,494
Depreciation and amortization									(71,508		)
General and administrative									(13,780		)
Acquisition costs									(5,047		)
Interest expense									(44,602		)
Other income									634
Gain on sale of real estate (classified as continuing operations)									570
Discontinued operations:
Income from operations of properties sold or held for sale									546
Gain on sale of real estate									105,985
Net income									109,292
Less: Net loss attributable to noncontrolling interests in subsidiaries									17
Net income attributable to the controlling interests									109,309
Capital expenditures	$	30,974	$	4,157	$	6,814	$	44	$	41,989

	Nine Months Ended September 30, 2013
	Office		Medical Office		Retail		Multifamily		Corporate and Other		Consolidated
Real estate rental revenue	$	113,849	$	—	$	42,105	$	40,349	$	—	$	196,303
Real estate expenses	42,697		—		10,355		16,415		—		69,467
Net operating income	$	71,152	$	—	$	31,750	$	23,934	$	—	$	126,836
Depreciation and amortization											(63,328		)
Acquisition costs											(448		)
General and administrative											(11,717		)
Interest expense											(47,944		)
Other income											705
Discontinued operations:
Income from operations of properties sold or held for sale											11,139
Gain on sale of real estate											3,195
Net income											18,438
Less: Net income attributable to noncontrolling interests in subsidiaries											—
Net income attributable to the controlling interests											$	18,438
Capital expenditures	$	26,773	$	3,035	$	2,732	$	6,808	$	125	$	39,473

NOTE 11: SUBSEQUENT EVENTS

On October 1, 2014, we closed on the purchase of Spring Valley Retail Center, a 75,000 square foot retail property in Washington, DC, for $40.5 million. We funded this acquisition with borrowings on our unsecured lines of credit. The initial accounting for the acquisition is incomplete due to the timing of the acquisition relative to the filing date of this report and, therefore, purchase price accounting and pro forma disclosures are not included.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto appearing in Item 1 of this report and the more detailed information contained in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on March 3, 2014.

We refer to the three months ended September 30, 2014 and September 30, 2013 as the “2014 Quarter” and the “2013 Quarter,” respectively, and the nine months ended September 30, 2014 and September 30, 2013 as the “2014 Period” and the “2013 Period,” respectively.

Forward-Looking Statements

This Form 10-Q contains forward-looking statements which involve risks and uncertainties. Forward-looking statements include statements in this report preceded by, followed by or that include the words “believe,” “expect,” “intend,” “anticipate,” “potential,” “project,” “will” and other similar expressions. We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for these statements. The following important factors, in addition to those discussed elsewhere in this Form 10-Q, could affect our future results and could cause those results to differ materially from those expressed in the forward-looking statements: (a) the effect of credit and financial market conditions; (b) the availability and cost of capital; (c) fluctuations in interest rates; (d) the economic health of our tenants; (e) the timing and pricing of lease transactions; (f) the economic health of the greater Washington metro region, or other markets we may enter; (g) the effects of changes in Federal government spending; (h) the supply of competing properties; (i) consumer confidence; (j) unemployment rates; (k) consumer tastes and preferences; (l) our future capital requirements; (m) inflation; (n) compliance with applicable laws, including those concerning the environment and access by persons with disabilities; (o) governmental or regulatory actions and initiatives; (p) changes in general economic and business conditions; (q) terrorist attacks or actions; (r) acts of war; (s) weather conditions; (t) the effects of changes in capital available to the technology and biotechnology sectors of the economy, and (u) other factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on March 3, 2014. We undertake no obligation to update our forward-looking statements or risk factors to reflect new information, future events, or otherwise.

General

Introductory Matters

We provide our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations and financial condition. We organize the MD&A as follows:

• Overview. Discussion of our business, operating results, investment activity and capital requirements, and summary of our significant transactions to provide context for the remainder of MD&A.

• Results of Operations. Discussion of our financial results comparing the 2014 Quarter to the 2013 Quarter and the 2014 Period to the 2013 Period.

• Liquidity and Capital Resources. Discussion of our financial condition and analysis of changes in our capital structure and cash flows.

• Critical Accounting Policies and Estimates. Descriptions of accounting policies that reflect significant judgments and estimates used in the preparation of our consolidated financial statements.

When evaluating our financial condition and operating performance, we focus on the following financial and non-financial indicators:

• Net operating income (“NOI”), calculated as real estate rental revenue less real estate expenses excluding depreciation and amortization and general and administrative expenses. NOI is a non-GAAP supplemental measure to net income;

• Funds From Operations (“FFO”), calculated as set forth below under the caption “Funds from Operations.” FFO is a non-GAAP supplemental measure to net income;

• Occupancy, calculated as occupied square footage as a percentage of total square footage as of the last day of that period;

• Leased percentage, calculated as the percentage of available physical net rentable area leased for our commercial segments and percentage of apartments leased for our multifamily segment;

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• Rental rates; and

• Leasing activity, including new leases, renewals and expirations.

For purposes of evaluating comparative operating performance, we categorize our properties as “same-store”, “non-same-store” or discontinued operations.A "same-store" property is one that was owned for the entirety of the periods being evaluated and excludes properties under redevelopment or development and properties purchased or sold at any time during the periods being compared. A "non-same-store" property is one that was acquired, under redevelopment or development, or placed into service during either of the periods being evaluated. We define redevelopment properties as those for which we expect to spend significant development and construction costs on existing or acquired buildings pursuant to a formal plan which has a current impact on operating results, occupancy and the ability to lease space with the intended result of a higher economic return on the property. Properties under redevelopment or development are included within the non-same-store properties beginning in the period during which redevelopment or development activities commence. Redevelopment and development properties are included in the same-store pool upon completion of the redevelopment or development, and the earlier of achieving 90% occupancy or two years after completion.

Overview

Business

Our revenues are derived primarily from the ownership and operation of income-producing properties in the greater Washington metro region. As of September 30, 2014, we owned a diversified portfolio of 54 properties, totaling approximately 7.3 million square feet of commercial space and 2,890 multifamily units, and land held for development. These 54 properties consisted of 25 office properties, 16 retail centers and 13 multifamily properties.

Operating Results

Real estate rental revenue, NOI, net income attributable to the controlling interests and FFO for the three months ended September 30, 2014 and 2013 were as follows (in thousands):

	Three Months Ended September 30,
	2014		2013		$ Change			% Change
Real estate rental revenue	$	73,413	$	65,828	$	7,585		11.5	%
NOI (1)	$	47,499	$	42,585	$	4,914		11.5	%
Net income attributable to the controlling interests	$	3,668	$	5,840	$	(2,172	)	(37.2	)%
FFO (2)	$	28,022	$	30,223	$	(2,201	)	(7.3	)%
(1) See page 25 of the MD&A for reconciliations of NOI to net income.
(2) See page 35 of the MD&A for reconciliations of FFO to net income.

The increases in real estate rental revenue and NOI are primarily due to acquisitions ($4.7 million and $2.1 million, respectively)and higher real estate rental revenue and NOI from same-store properties primarily due to higher occupancy and rental rates ($2.3 million and $0.5 million, respectively). Same-store occupancy increased to 93.2% from 89.8% one year ago, with increases in all segments.

The decreases in net income attributable to the controlling interests and FFO are primarily due to the loss of income from the properties included in the Medical Office Portfolio, which was sold in stages during the fourth quarter of 2013 and the first quarter of 2014.

Investment Activity

Subsequent to the end of the 2014 Quarter, we acquired Spring Valley Retail Center, a 75,000 square foot retail property in Washington, DC, for $40.5 million and incurred acquisition costs of approximately $0.8 million. We funded the purchase price with borrowings on our unsecured lines of credit. This acquisition is consistent with our current strategy of focusing on properties inside the Washington metro region's Beltway, near major transportation nodes and in areas of strong employment drivers and superior growth demographics.

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Capital Requirements

There are no debt maturities for the remainder of 2014, though we will continue to make recurring principal amortization payments. As of September 30, 2014, our unsecured lines of credit had $5.0 million in borrowings outstanding, leaving a remaining borrowing capacity of $495.0 million. Subsequent to the end of the 2014 Quarter, we executed borrowings on the unsecured lines of credit for an additional $50.0 million for the acquisition of Spring Valley Retail Center and for general corporate purposes.

Significant Transactions

Our significant transactions during the 2014 and 2013 Periods are summarized as follows:

2014 Period

• The disposition of the Woodburn Medical Park I and II and Prosperity Medical Center I, II and III medical office buildings with a combined 427,000 square feet, for a contract sales price of $193.6 million, resulting in a gain on sale of $106.0 million. These sales transactions completed the disposition of the Medical Office Portfolio.

• The acquisition of Yale West, a 216-unit multifamily property in Washington, DC, for a contract purchase price of $73.0 million. We assumed a $48.2 million mortgage with this acquisition. We incurred $1.8 million of acquisition costs related to this transaction.

• The acquisition of The Army Navy Club Building, a 108,000 square foot office property in Washington, DC, for a contract purchase price of $79.0 million. We assumed a $52.7 million mortgage with this acquisition. We incurred $1.3 million of acquisition costs with this transaction.

• The acquisition of 1775 Eye Street, NW, a 185,000 square foot office property in Washington, DC, for a contract purchase price of $104.5 million. We incurred $1.7 million of acquisition costs with this transaction.

• The execution of new leases for 0.6 million square feet of commercial space with an average rental rate increase of 12.4% over expiring leases.

2013 Period

• The execution of four separate contracts with a single buyer for the sale of the entire medical office segment, consisting of 17 medical office assets, and two office assets, 6565 Arlington Boulevard and Woodholme Center (both of which have significant medical office tenancy), encompassing in total approximately 1.5 million square feet. The assets sold also include land held for development at 4661 Kenmore Avenue. The sales prices under the four agreements aggregated to $500.8 million. Purchase and Sale Agreement #1 ($303.4 million of the aggregate sales price) and Purchase and Sale Agreement #2 ($3.8 million of the aggregate sales price) closed in November 2013, resulting in a gain on sale of real estate of $18.9 million. Purchase and Sale Agreement #3 ($79.0 million of the aggregate sales price) and Purchase and Sale Agreement #4 ($114.6 million of the aggregate sales price) closed in January 2014, resulting in a gain on sale of real estate of $106.0 million.

• The disposition of the Atrium Building, a 80,000 square foot office building, for a contract sales price of $15.8 million, resulting in a gain on sale of $3.2 million.

• The execution of new leases for 1.2 million square feet of commercial space, excluding leases at properties classified as sold or held for sale, with an average rental rate increase of 9.3% over expiring leases.

Results of Operations

The discussion that follows is based on our consolidated results of operations for the 2014 and 2013 Quarters and Periods. The ability to compare one period to another may be significantly affected by acquisitions completed and dispositions made during those periods. To provide more insight into our operating results, we divide our discussion into two main sections:

• Consolidated Results of Operations: Overview analysis of results on a consolidated basis.

• Net Operating Income: Detailed analysis of same-store and non-same-store NOI results by segment.

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Consolidated Results of Operations

Real Estate Rental Revenue

Real estate rental revenue for properties classified as continuing operations for the three and nine months ended September 30, 2014 and 2013 were as follows (in thousands):

	Three Months Ended September 30,						Change					Nine Months Ended September 30,						Change
	2014			2013			$			%		2014			2013			$		%
Minimum base rent	$	62,595		$	56,762		$	5,833		10.3	%	$	181,588		$	169,373		$	12,215	7.2	%
Recoveries from tenants	7,861			6,576			1,285			19.5	%	23,496			20,159			3,337		16.6	%
Provisions for doubtful accounts	(459		)	(813		)	354			43.5	%	(1,594		)	(2,725		)	1,131		41.5	%
Lease termination fees	24			53			(29		)	(54.7	)%	822			242			580		239.7	%
Parking and other tenant charges	3,392			3,250			142			4.4	%	9,966			9,254			712		7.7	%
	$	73,413		$	65,828		$	7,585		11.5	%	$	214,278		$	196,303		$	17,975	9.2	%

Minimum Base Rent: Minimum base rent increased by $5.8 million in the 2014 Quarter primarily due to acquisitions ($4.5 million) and higher occupancy ($2.3 million) and rental rates ($0.4 million) at same-store properties, partially offset by lower occupancy ($1.4 million) at 7900 Westpark Drive, which is under redevelopment.

Minimum base rent increased by $12.2 million in the 2014 Period primarily due to acquisitions ($10.3 million) and higher occupancy ($4.4 million) and rental rates ($1.6 million) at same-store properties, partially offset by lower occupancy ($3.6 million) at 7900 Westpark Drive, which is under redevelopment, and higher abatements ($0.9 million) at same-store properties.

Recoveries from Tenants: Recoveries from tenants increased by $1.3 million in the 2014 Quarter primarily due to acquisitions ($1.1 million).

Recoveries from tenants increased by $3.3 million in the 2014 Period primarily due to acquisitions ($2.3 million) and higher reimbursements for operating expenses at same-store properties ($1.6 million), partially offset by lower reimbursements ($0.4 million) at 7900 Westpark Drive, which is under redevelopment and has lower occupancy in the 2014 Period.

Provisions for Doubtful Accounts: Provisions for doubtful accounts decreased by $0.4 million in the 2014 Quarter primarily due to lower net provisions in the retail segment due to fewer tenants requiring reserves.

Provisions for doubtful accounts decreased by $1.1 million in the 2014 Period primarily due to lower net provisions in the retail ($0.7 million) and office ($0.5 million) segments due to fewer tenants requiring reserves.

Lease Termination Fees: Lease termination fees slightly decreased in 2013 Quarter and increased by $0.6 million in the 2014 Period due to lease terminations in the office segment.

Parking and Other Tenant Charges: Parking and other tenant charges increased by $0.1 million in the 2014 Quarter primarily due to acquisitions.

Parking and other tenant charges increased by $0.7 million in the 2014 Period primarily due to acquisitions.

Occupancy by segment for properties classified as continuing operations as of September 30, 2014 and 2013 was as follows:

	As of September 30,
	2014		2013		Change
Office	87.1	%	86.4	%	0.7	%
Retail	94.4	%	91.4	%	3.0	%
Multifamily	94.3	%	94.1	%	0.2	%
Total	90.7	%	89.6	%	1.1	%

Occupancy represents occupied square footage indicated as a percentage of total square footage as of the last day of that period.

22

A detailed discussion of occupancy by segment can be found in the Net Operating Income section.

Real Estate Expenses

Real estate expenses for properties classified as continuing operations for the three and nine months ended September 30, 2014 and 2013 were as follows (in thousands):

	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2014		2013		$		%		2014		2013		$		%
Property operating expenses	$	17,516	$	15,990	$	1,526	9.5	%	$	53,519	$	48,007	$	5,512	11.5	%
Real estate taxes	8,398		7,253		1,145		15.8	%	24,265		21,460		2,805		13.1	%
	$	25,914	$	23,243	$	2,671	11.5	%	$	77,784	$	69,467	$	8,317	12.0	%

Real estate expenses as a percentage of revenue were 35.3% for both the 2014 and 2013 Quarters, and 36.3% and 35.4% for the 2014 and 2013 Periods, respectively.

Property Operating Expenses: Property operating expenses include utilities, repairs and maintenance, property administration and management, operating services, common area maintenance, property insurance, bad debt and other operating expenses.

Property operating expenses increased by $1.5 million in the 2014 Quarter primarily due to acquisitions.

Property operating expenses increased by $5.5 million in the 2014 Period primarily due to acquisitions ($3.4 million) and higher utilities ($1.2 million) and snow removal ($0.9 million) expenses at same-store properties.

Real Estate Taxes: Real estate taxes increased by $1.1 million in the 2014 Quarter primarily due to acquisitions.

Real estate taxes increased by $2.8 million in the 2014 Period primarily due to acquisitions ($2.2 million) and higher assessments ($0.5 million) at same-store properties.

Other Operating Expenses

Other operating expenses for the three and nine months ended September 30, 2014 and 2013 were as follows (in thousands):

	Three Months Ended September 30,				Change					Nine Months Ended September 30,				Change
	2014		2013		$			%		2014		2013		$			%
Depreciation and amortization	$	24,354	$	21,168	$	3,186		15.1	%	$	71,508	$	63,328	$	8,180		12.9	%
Interest expense	15,087		15,930		(843		)	(5.3	)%	44,602		47,944		(3,342		)	(7.0	)%
Acquisition costs	69		148		(79		)	(53.4	)%	5,047		448		4,599			1,026.6	%
General and administrative	4,523		3,850		673			17.5	%	13,780		11,717		2,063			17.6	%
	$	44,033	$	41,096	$	2,937		7.1	%	$	134,937	$	123,437	$	11,500		9.3	%

Depreciation and amortization: Depreciation and amortization increased by $3.2 million and $8.2 million in the 2014 Quarter and Period, respectively, primarily due to acquisitions.

Interest Expense: Interest expense by debt type for the three and nine months ended September 30, 2014 and 2013 was as follows (in thousands):

	Three Months Ended September 30,						Change					Nine Months Ended September 30,						Change
	2014			2013			$			%		2014			2013			$			%
Notes payable	$	9,295		$	10,640		$	(1,345	)	(12.6	)%	$	28,119		$	32,531		$	(4,412	)	(13.6	)%
Mortgages	5,763			4,551			1,212			26.6	%	16,131			13,625			2,506			18.4	%
Lines of credit	620			863			(243		)	(28.2	)%	1,797			2,395			(598		)	(25.0	)%
Capitalized interest	(591		)	(124		)	(467		)	376.6	%	(1,445		)	(607		)	(838		)	138.1	%
Total	$	15,087		$	15,930		$	(843	)	(5.3	)%	$	44,602		$	47,944		$	(3,342	)	(7.0	)%

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Interest expense from notes payable decreased in the 2014 Quarter and Period primarily due to the repayment of $100.0 million of 5.25% unsecured notes in January 2014 and the repayment of $60.0 million of 5.125% notes in March 2013. Interest expense from mortgage notes increased primarily due to the assumption of mortgages with the acquisitions of Yale West and The Army Navy Club Building during the first quarter of 2014. Interest expense from our unsecured lines of credit decreased due to lower borrowing activity during 2014. Capitalized interest increased because of additional expenditures on the development project at The Maxwell and the redevelopment project at 7900 Westpark Drive.

Acquisition Costs: Acquisition costs increased by $4.6 million in the 2014 Period primarily due to closing on the acquisitions of Yale West, The Army Navy Club Building and 1775 Eye Street, NW.

General and Administrative Expense: General and administrative expense increased by $0.7 million in the 2014 Quarter, primarily due to higher officer long-term incentive compensation ($0.4 million) and severance ($0.3 million) expense.

General and administrative expense increased by $2.1 million in the 2014 Period, primarily due to higher officer long-term incentive compensation ($1.1 million) and severance ($0.9 million) expense.

Discontinued Operations

Operating results of the properties classified as discontinued operations for the three and nine months ended September 30, 2014 and 2013 were as follows (in thousands):

	Three Months Ended September 30,					Change					Nine Months Ended September 30,						Change
	2014		2013			$			%		2014			2013			$			%
Revenues	$	—	$	12,073		$	(12,073	)	(100.0	)%	$	892		$	37,141		$	(36,249	)	(97.6	)%
Property expenses	—		(4,398		)	4,398			(100.0	)%	(346		)	(12,856		)	12,510			(97.3	)%
Depreciation and amortization	—		(3,215		)	3,215			(100.0	)%	—			(12,161		)	12,161			(100.0	)%
Interest expense	—		(329		)	329			(100.0	)%	—			(985		)	985			(100.0	)%
Total	$	—	$	4,131		$	(4,131	)	(100.0	)%	$	546		$	11,139		$	(10,593	)	(95.1	)%

The decrease in income from discontinued operations is primarily due to the sale of the Medical Office Portfolio in January 2014 and November 2013 (see note 3 to the consolidated financial statements).

Net Operating Income

NOI is the primary performance measure we use to assess the results of our operations at the property level. We believe that NOI is useful as a performance measure because, when compared across periods, NOI reflects the impact on operations of trends in occupancy rates, rental rates and operating costs on an unleveraged basis, providing perspective not immediately apparent from net income. NOI excludes certain components from net income in order to provide results more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. As a result of the foregoing, we provide NOI as a supplement to net income or income from continuing operations, calculated in accordance with GAAP. NOI does not represent net income or income from continuing operations, in either case calculated in accordance with GAAP. As such, it should not be considered an alternative to these measures as an indication of our operating performance. NOI is calculated as real estate rental revenue less real estate expenses excluding depreciation and amortization, interest expense and general and administrative expenses. A reconciliation of NOI to net income follows.

24

2014 Quarter Compared to 2013 Quarter

The following tables of selected operating data reconcile NOI to net income and provide the basis for our discussion of NOI in the 2014 Quarter compared to the 2013 Quarter (in thousands).

	Three Months Ended September 30,
	2014			2013			$ Change		% Change
Real Estate Rental Revenue
Same-store	$	65,360		$	62,477		$	2,883	4.6	%
Non-same-store(1)	8,053			3,351			4,702		140.3	%
Total real estate rental revenue	$	73,413		$	65,828		$	7,585	11.5	%
Real Estate Expenses
Same-store	$	21,984		$	21,963		$	21	0.1	%
Non-same-store(1)	3,930			1,280			2,650		207.0	%
Total real estate expenses	$	25,914		$	23,243		$	2,671	11.5	%
NOI
Same-store	$	43,376		$	40,514		$	2,862	7.1	%
Non-same-store(1)	4,123			2,071			2,052		99.1	%
Total NOI	$	47,499		$	42,585		$	4,914	11.5	%
Reconciliation to Net Income
NOI	$	47,499		$	42,585
Depreciation and amortization	(24,354		)	(21,168		)
General and administrative expenses	(4,523		)	(3,850		)
Interest expense	(15,087		)	(15,930		)
Other income	192			220
Acquisition costs	(69		)	(148		)
Discontinued operations:
Income from operations of properties sold or held for sale (2)	—			4,131
Net income	3,658			5,840
Less: Net loss attributable to noncontrolling interests	10			—
Net income attributable to the controlling interests	$	3,668		$	5,840

(1)Non-same-store properties classified as continuing operations include:

2014 Multifamily acquisition – Yale West

2014 Office acquisitions – The Army Navy Club Building and 1775 Eye Street, NW

2014 Retail disposition – 5740 Columbia Road (parcel at Gateway Overlook)

2013 Multifamily acquisition – The Paramount

2013 Office redevelopment property – 7900 Westpark Drive

⁽²⁾    Sold and held for sale properties classified as discontinued operations include:

2014 sold – Woodburn Medical Park I and II and Prosperity Medical Center I, II and III

2013 sold – Medical Office Portfolio Transactions I and II (see note 3 to the consolidated financial

statements)

Real estate rental revenue from same-store properties increased by $2.9 million in the 2014 Quarter primarily due to higher occupancy ($2.3 million), higher rental rates ($0.5 million) and lower reserves for uncollectible revenue ($0.4 million), partially offset by higher rent abatements ($0.4 million).

Real estate expenses from same-store properties slightly increased in the 2014 Quarter, as higher bad debt expense ($0.3 million) was offset by lower utilities expense ($0.3 million).

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	As of September 30,
Occupancy	2014		2013
Same-store	93.2	%	89.8	%
Non-same-store	71.9	%	85.2	%
Total	90.7	%	89.6	%

Same-store occupancy increased to 93.2%, with increases in all segments. The decrease in non-same-store occupancy is primarily due to lower occupancy at 7900 Westpark Drive, which is under redevelopment. During the 2014 Quarter, 57.3% of the commercial square footage expiring was renewed as compared to 75.0% in the 2013 Quarter, excluding properties sold or classified as held for sale. During the 2014 Quarter, we executed leases (excluding leases at properties classified as held for sale) for 263,042 commercial square feet at an average rental rate of $23.66 per square foot, an increase of 16.1%, with average tenant improvements and leasing commissions and incentives (including free rent) of $17.03 per square foot.

An analysis of NOI by segment follows.

Office Segment:

	Three Months Ended September 30,
	2014		2013		$ Change		% Change
Real Estate Rental Revenue
Same-store	$	36,917	$	34,903	$	2,014	5.8	%
Non-same-store(1)	5,711		3,318		2,393		72.1	%
Total real estate rental revenue	$	42,628	$	38,221	$	4,407	11.5	%
Real Estate Expenses
Same-store	$	13,252	$	13,241	$	11	0.1	%
Non-same-store(1)	2,814		1,276		1,538		120.5	%
Total real estate expenses	$	16,066	$	14,517	$	1,549	10.7	%
NOI
Same-store	$	23,665	$	21,662	$	2,003	9.2	%
Non-same-store(1)	2,897		2,042		855		41.9	%
Total NOI	$	26,562	$	23,704	$	2,858	12.1	%

(1)Non-same-store properties include:

2014 acquisitions – The Army Navy Club Building and 1775 Eye Street, NW

2013 redevelopment property – 7900 Westpark Drive

Real estate rental revenue from same-store properties increased by $2.0 million in the 2014 Quarter primarily due to higher occupancy ($1.7 million) and higher rental rates ($0.5 million), partially offset by higher rent abatements ($0.4 million).

Real estate expenses from same-store properties slightly increased in the 2014 Quarter, as higher bad debt expense ($0.2 million) was offset by lower utilities expense ($0.2 million).

	As of September 30,
Occupancy	2014		2013
Same-store	91.8	%	86.6	%
Non-same-store	63.9	%	85.1	%
Total	87.1	%	86.4	%

Same-store occupancy increased to 91.8% primarily due to higher occupancy at 1227 25th Street, 6110 Executive Boulevard and 1901 Pennsylvania Avenue. Non-same-store occupancy decreased to 63.9% primarily due to lower occupancy at 7900 Westpark Drive, which is under redevelopment. During the 2014 Quarter, 57.4% of the square footage that expired was renewed compared to 68.8% in the 2013 Quarter, excluding properties sold or classified as held for sale. During the 2014 Quarter, we executed leases (excluding leases at properties classified as held for sale) for 82,066 square feet of office space at an average rental rate of $39.79

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per square foot, an increase of 23.4%, with average tenant improvements and leasing commissions and incentives (including free rent) of $48.42 per square foot.

Retail Segment:

	Three Months Ended September 30,
	2014		2013		$ Change			% Change
Real Estate Rental Revenue
Same-store	$	14,825	$	13,957	$	868		6.2	%
Non-same-store(1)	—		33		(33		)	(100.0	)%
Total real estate rental revenue	$	14,825	$	13,990	$	835		6.0	%
Real Estate Expenses
Same-store	$	3,204	$	3,203	$	1		—	%
Non-same-store(1)	—		4		(4		)	(100.0	)%
Total real estate expenses	$	3,204	$	3,207	$	(3	)	(0.1	)%
NOI
Same-store	$	11,621	$	10,754	$	867		8.1	%
Non-same-store(1)	—		29		(29		)	(100.0	)%
Total NOI	$	11,621	$	10,783	$	838		7.8	%

(1)Non-same-store properties include:

2014 disposition – 5740 Columbia Road (parcel at Gateway Overlook)

Real estate rental revenue increased by $0.9 million in the 2014 Quarter primarily due to higher occupancy ($0.4 million), lower provisions for uncollectible revenue ($0.3 million) and higher rental rates ($0.1 million).

Real estate expenses slightly increased in the 2014 Quarter, as higher bad debt expense ($0.1 million) was offset by lower utilities expense ($0.1 million).

	As of September 30,
Occupancy	2014		2013
Same-store	94.4	%	91.4	%
Non-same-store	N/A		100.0	%
Total	94.4	%	91.4	%

Same-store occupancy increased to 94.4% primarily due to higher occupancy at Bradlee Shopping Center and Westminster Shopping Center. During the 2014 Quarter, 56.7% of the square footage that expired was renewed compared to 89.8% in the 2013 Quarter. During the 2014 Quarter, we executed leases for 180,976 square feet of retail space at an average rental rate of $16.34, an increase of 9.0%, with average tenant improvements and leasing commissions and incentives (including free rent) of $2.79 per square foot.

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Multifamily Segment:

	Three Months Ended September 30,
	2014		2013		$ Change			% Change
Real Estate Rental Revenue
Same-store	$	13,618	$	13,617	$	1		—	%
Non-same-store(1)	2,342		—		2,342			N/A
Total real estate rental revenue	$	15,960	$	13,617	$	2,343		17.2	%
Real Estate Expenses
Same-store	$	5,528	$	5,519	$	9		0.2	%
Non-same-store(1)	1,116		—		1,116			N/A
Total real estate expenses	$	6,644	$	5,519	$	1,125		20.4	%
NOI
Same-store	$	8,090	$	8,098	$	(8	)	(0.1	)%
Non-same-store(1)	1,226		—		1,226			N/A
Total NOI	$	9,316	$	8,098	$	1,218		15.0	%

(1)Non-same-store properties include:

2014 Multifamily acquisition – Yale West

2013 Multifamily acquisition – The Paramount

Real estate rental revenue slightly increased in the 2014 Quarter, as higher occupancy ($0.2 million) was offset by lower rental rates ($0.1 million).

Real estate expenses slightly increased in the 2014 Quarter primarily due to higher real estate taxes ($0.1 million).

	As of September 30,
Occupancy	2014		2013
Same-store	94.5	%	94.1	%
Non-same-store	92.9	%	N/A
Total	94.3	%	94.1	%

Same-store occupancy increased to 94.5% primarily due to higher occupancy at 3801 Connecticut Avenue.

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2014 Period Compared to 2013 Period

The following tables of selected operating data reconcile NOI to net income and provide the basis for our discussion of NOI in the 2014 Period compared to the 2013 Period (in thousands).

	Nine Months Ended September 30,
	2014			2013			$ Change		% Change
Real Estate Rental Revenue
Same-store	$	193,834		$	186,154		$	7,680	4.1	%
Non-same-store(1)	20,444			10,149			10,295		101.4	%
Total real estate rental revenue	$	214,278		$	196,303		$	17,975	9.2	%
Real Estate Expenses
Same-store	$	68,142		$	65,616		$	2,526	3.8	%
Non-same-store(1)	9,642			3,851			5,791		150.4	%
Total real estate expenses	$	77,784		$	69,467		$	8,317	12.0	%
NOI
Same-store	$	125,692		$	120,538		$	5,154	4.3	%
Non-same-store(1)	10,802			6,298			4,504		71.5	%
Total NOI	$	136,494		$	126,836		$	9,658	7.6	%
Reconciliation to Net Income
NOI	$	136,494		$	126,836
Depreciation and amortization	(71,508		)	(63,328		)
Gain on sale of real estate (classified as continuing operations)	570			—
General and administrative expenses	(13,780		)	(11,717		)
Interest expense	(44,602		)	(47,944		)
Other income	634			705
Acquisition costs	(5,047		)	(448		)
Discontinued operations:
Income from operations of properties sold or held for sale (2)	546			11,139
Gain on sale of real estate	105,985			3,195
Net income	109,292			18,438
Less: Net loss attributable to noncontrolling interests	17			—
Net income attributable to the controlling interests	$	109,309		$	18,438

(1)Non-same-store properties classified as continuing operations include:

2014 Multifamily acquisition – Yale West

2014 Office acquisitions – The Army Navy Club Building and 1775 Eye Street, NW

2014 Retail disposition – 5740 Columbia Road (parcel at Gateway Overlook)

2013 Multifamily acquisition – The Paramount

2013 Office redevelopment property – 7900 Westpark Drive

⁽²⁾    Sold properties classified as discontinued operations include:

2014 sold – Woodburn Medical Park I and II and Prosperity Medical Center I, II and III

2013 sold – Atrium Building and Medical Office Portfolio Transactions I and II (see note 3 to the consolidated financial

statements)

Real estate rental revenue from same-store properties increased by $7.7 million in the 2014 Period primarily due to higher occupancy ($4.4 million), higher rental rates ($1.6 million), higher reimbursements ($1.5 million), lower reserves for uncollectible revenue ($1.2 million) and higher lease termination fees ($0.4 million), partially offset by higher rent abatements ($1.2 million).

Real estate expenses from same-store properties increased by $2.5 million in the 2014 Period primarily due to higher utilities expenses ($1.2 million), snow removal expenses ($0.9 million) and real estate taxes ($0.5 million).

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During the 2014 Period, 62.7% of the commercial square footage expiring was renewed as compared to 72.9% in the 2013 Period, excluding properties sold or classified as held for sale. During the 2014 Period, we executed leases for 641,495 commercial square feet at an average rental rate of $29.87 per square foot, an increase of 12.4%, with average tenant improvements and leasing commissions and incentives (including free rent) of $30.33 per square foot.

An analysis of NOI by segment follows.

Office Segment:

	Nine Months Ended September 30,
	2014		2013		$ Change		% Change
Real Estate Rental Revenue
Same-store	$	109,492	$	103,800	$	5,692	5.5	%
Non-same-store(1)	14,076		10,049		4,027		40.1	%
Total real estate rental revenue	$	123,568	$	113,849	$	9,719	8.5	%
Real Estate Expenses
Same-store	$	40,778	$	38,861	$	1,917	4.9	%
Non-same-store(1)	6,801		3,836		2,965		77.3	%
Total real estate expenses	$	47,579	$	42,697	$	4,882	11.4	%
NOI
Same-store	$	68,714	$	64,939	$	3,775	5.8	%
Non-same-store(1)	7,275		6,213		1,062		17.1	%
Total NOI	$	75,989	$	71,152	$	4,837	6.8	%

(1)Non-same-store properties include:

2014 acquisitions – The Army Navy Club Building and 1775 Eye Street, NW

2013 redevelopment property – 7900 Westpark Drive

Real estate rental revenue from same-store properties increased by $5.7 million in the 2014 Period primarily due to higher occupancy ($3.5 million), higher rental rates ($1.4 million), higher reimbursements ($0.8 million), lower provisions for uncollectible revenue ($0.5 million) and higher lease termination fees ($0.4 million), partially offset by higher rent abatements ($1.0 million).

Real estate expenses from same-store properties increased by $1.9 million primarily due to higher utilities expenses ($1.1 million), higher ground rent at 2000 M Street ($0.2 million), higher custodial expenses ($0.2 million), higher real estate taxes ($0.1 million) and higher snow removal expenses ($0.1 million).

During the 2014 Period, 60.6% of the square footage that expired was renewed compared to 63.7% in the 2013 Period, excluding properties sold or classified as held for sale. During the 2014 Period, we executed leases for 361,640 square feet of office space at an average rental rate of $36.69 per square foot, an increase of 13.7%, with average tenant improvements and leasing commissions and incentives (including free rent) of $45.78 per square foot.

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Retail Segment:

	Nine Months Ended September 30,
	2014		2013		$ Change			% Change
Real Estate Rental Revenue
Same-store	$	44,163	$	42,005	$	2,158		5.1	%
Non-same-store(1)	46		100		(54		)	(54.0	)%
Total real estate rental revenue	$	44,209	$	42,105	$	2,104		5.0	%
Real Estate Expenses
Same-store	$	10,652	$	10,340	$	312		3.0	%
Non-same-store(1)	20		15		5			33.3	%
Total real estate expenses	$	10,672	$	10,355	$	317		3.1	%
NOI
Same-store	$	33,511	$	31,665	$	1,846		5.8	%
Non-same-store(1)	26		85		(59		)	(69.4	)%
Total NOI	$	33,537	$	31,750	$	1,787		5.6	%

(1)Non-same-store properties include:

2014 disposition – 5740 Columbia Road (parcel at Gateway Overlook)

Real estate rental revenue from same-store properties increased by $2.2 million in the 2014 Period primarily due to higher occupancy ($0.7 million), lower provisions for uncollectible revenue ($0.7 million) and higher reimbursements ($0.6 million).

Real estate expenses from same-store properties increased by $0.3 million in the 2014 Period primarily due to higher snow removal expenses ($0.7 million), partially offset by higher recoveries of bad debt ($0.4 million).

During the 2014 Period, 80.0% of the square footage that expired was renewed compared to 89.1% in the 2013 Period. During the 2014 Period, we executed leases for 279,855 square feet of retail space at an average rental rate of $21.22, an increase of 10.0%, with average tenant improvements and leasing commissions and incentives (including free rent) of $10.37 per square foot.

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Multifamily Segment:

	Nine Months Ended September 30,
	2014		2013		$ Change			% Change
Real Estate Rental Revenue
Same-store	$	40,179	$	40,349	$	(170	)	(0.4	)%
Non-same-store(1)	6,322		—		6,322			N/A
Total real estate rental revenue	$	46,501	$	40,349	$	6,152		15.2	%
Real Estate Expenses
Same-store	$	16,712	$	16,415	$	297		1.8	%
Non-same-store(1)	2,821		—		2,821			N/A
Total real estate expenses	$	19,533	$	16,415	$	3,118		19.0	%
NOI
Same-store	$	23,467	$	23,934	$	(467	)	(2.0	)%
Non-same-store(1)	3,501		—		3,501			N/A
Total NOI	$	26,968	$	23,934	$	3,034		12.7	%

(1)Non-same-store properties include:

2014 acquisition – Yale West

2013 acquisition – The Paramount

Real estate rental revenue from same-store properties decreased by $0.2 million in the 2014 Period primarily due to higher rent abatements.

Real estate expenses from same-store properties increased by $0.3 million in the 2014 Period primarily due to higher real estate taxes.

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Liquidity and Capital Resources

Capital Requirements

We expect that we will have significant capital requirements, including the following items. There can be no assurance that our capital requirements will not be materially higher or lower than these expectations.

• Funding dividends and distributions to our shareholders;

• Through September 30, 2014, we have invested approximately $50.0 million in our existing portfolio of operating assets, including approximately $27.0 million to fund tenant-related capital requirements and leasing commissions, and expect to invest an additional $20.0 - $25.0 million through the end of the year, including approximately $10.0 - $15.0 million to fund tenant-related capital requirements and leasing commissions;

• Through September 30, 2014, we have invested $29.0 million in our development and redevelopment projects, and expect to invest an additional $15.0 - $20.0 million through the end of the year; and

• Funding for potential property acquisitions throughout the remainder of 2014, offset by proceeds from property dispositions.

Debt Financing

Our total debt at September 30, 2014 and December 31, 2013 is as follows (in thousands):

	September 30, 2014		December 31, 2013
Mortgage notes payable	$	413,330	$	294,671
Lines of credit	5,000		—
Notes payable	747,082		846,703
	$	1,165,412	$	1,141,374

Mortgage Notes Payable

At September 30, 2014, our $413.3 million in mortgage notes payable, which include $4.0 million in net unamortized discounts due to fair value adjustments, bore an effective weighted average fair value interest rate of 5.3% and had an estimated weighted average maturity of 3.3 years. We may either assume mortgage debt from time-to-time in conjunction with property acquisitions or initiate mortgage debt on existing properties.

Lines of Credit

Our primary external sources of liquidity are our two revolving credit facilities. Credit Facility No. 1 is a four-year, $100.0 million unsecured credit facility maturing in June 2015, and may be extended by one year at our option. Credit Facility No. 2 is a four-year, $400.0 million unsecured credit facility maturing in July 2016, and may be extended for one year at our option. We had $5.0 million in borrowings outstanding as of September 30, 2014. Subsequent to the end of the 2014 Quarter, we executed borrowings on our unsecured lines of credit for an additional $50.0 million for the acquisition of Spring Valley Retail Center and for general corporate purposes.

Our unsecured credit facilities contain financial and other covenants with which we must comply. Failure to comply with any of the covenants under our unsecured credit facilities or other debt instruments could result in a default under one or more of our debt instruments. This could cause our lenders to accelerate the timing of payments and would therefore have a material adverse effect on our business, operations, financial condition and liquidity. In addition, our ability to draw on our unsecured credit facilities or incur other unsecured debt in the future could be restricted by the loan covenants. As of September 30, 2014, we were in compliance with our loan covenants.

Notes Payable

We generally issue unsecured notes to fund our real estate assets long term. In issuing future unsecured notes, we intend to ladder the maturities of our debt to mitigate exposure to interest rate risk in future years.

Our unsecured notes contain covenants with which we must comply. Failure to comply with any of the covenants under our unsecured notes could result in a default under one or more of our debt instruments. This could cause our debt holders to accelerate the timing of payments and would therefore have a material adverse effect on our business, operations, financial condition and liquidity. As of September 30, 2014, we were in compliance with our unsecured notes covenants.

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From time to time, we may seek to repurchase and cancel our outstanding notes through open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

Common Equity

We have authorized for issuance 100.0 million common shares, of which 66.7 million shares were outstanding at September 30, 2014.

We are party to a sales agency financing agreement with BNY Mellon Capital Markets, LLC relating to the issuance and sale of up to $250.0 million of our common shares from time to time over a period of no more than 36 months from June 2012. Sales of our common shares are made at market prices prevailing at the time of sale. We would use net proceeds from the sale of common shares under this program for general corporate purposes or to fund acquisitions. As of September 30, 2014, we have not issued any common shares under this program.

We have a dividend reinvestment program, whereby shareholders may use their dividends and optional cash payments to purchase common shares. The common shares sold under this program may either be common shares issued by us or common shares purchased in the open market. We did not issue any shares under this program during the 2014 Period.

Preferred Equity

Washington REIT's Board of Trustees can, at its discretion, authorize the issuance of up to 10.0 million shares of preferred stock. The ability to issue preferred equity provides Washington REIT an additional financing tool that may be used to raise capital for future acquisitions or other business purposes. As of September 30, 2014, no shares of preferred stock had been issued.

Dividends

We currently pay dividends quarterly at a rate of $0.30 per share. The maintenance of our dividend level is subject to various factors reviewed by the Board of Trustees in its discretion. These factors include our results of operations, the availability of cash to make the necessary dividend payments and the effect of REIT distribution requirements, which require at least 90% of our taxable income to be distributed to shareholders. When setting the dividend level, our Board looks in particular at trends in our level of funds from operations, together with associated recurring capital improvements, tenant improvements, leasing commissions and tenant incentives, and adjustments to straight-line rents to reflect cash rents received.

Our dividend and distribution payments for the three and nine months ended September 30, 2014 and 2013 are as follows (in thousands):

	Three Months Ended September 30,				Change					Nine Months Ended September 30,				Change
	2014		2013		$			%		2014		2013		$		%
Common dividends	$	20,019	$	20,033	$	(14	)	(0.1	)%	$	60,153	$	60,132	$	21	—	%
Distributions to noncontrolling interests	—		—		—			N/A		3,454		—		3,454		N/A
	$	20,019	$	20,033	$	(14	)	(0.1	)%	$	63,607	$	60,132	$	3,475	5.8	%

The $3.5 million distribution to noncontrolling interests in the 2014 Period is related to the disposition of 4661 Kenmore Avenue as part of the Medical Office Portfolio sale (see note 3 to the consolidated financial statements).

Historical Cash Flows

Cash flows from operations are an important factor in our ability to sustain our dividend at its current rate. If our cash flows from operations were to decline significantly from current levels, we may have to reduce our dividend. Consolidated cash flow information is summarized as follows (in thousands):

	Nine Months Ended September 30,						Change
	2014			2013			$			%
Net cash provided by operating activities	$	62.9		$	93.5		$	(30.6	)	(32.7	)%
Net cash used in investing activities	(36.7		)	(40.5		)	3.8			(9.4	)%
Net used in financing activities	(148.0		)	(64.2		)	(83.8		)	130.5	%

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Cash provided by operating activities decreased primarily due to the loss of income from properties sold as part of the Medical Office Portfolio.

Cash used in investing activities decreased primarily because the higher volume of acquisitions and development spending in the 2014 Period was partially offset by closing on Purchase and Sale Agreements #3 and #4 of the Medical Office Portfolio sale.

Cash used in financing activities increased primarily due to lower borrowings on the unsecured lines of credit.

Ratios of Earnings to Fixed Charges and Debt Service Coverage

The following table sets forth our ratios of earnings to fixed charges and debt service coverage for the three and nine months ended September 30, 2014 and 2013:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Earnings to fixed charges	1.20	x	1.10	x	1.03	x	1.07	x
Debt service coverage	2.68	x	2.73	x	2.52	x	2.73	x

We computed the ratio of earnings to fixed charges by dividing earnings by fixed charges. For this purpose, earnings consist of income from continuing operations attributable to the controlling interests plus fixed charges, less capitalized interest. Fixed charges consist of interest expense, including amortized costs of debt issuance, and interest costs capitalized. Certain prior period amounts have been reclassified to conform to the current period presentation due to the reclassification of certain properties as discontinued operations (see note 3 to the consolidated financial statements).

We computed the debt service coverage ratio by dividing Adjusted EBITDA (which is earnings before interest expense, taxes, depreciation, amortization, real estate impairment, gain on sale of real estate, gain/loss from the extinguishment of debt and gain/loss on non-disposal activities) by interest expense and principal amortization. We believe that Adjusted EBITDA is appropriate for use in our debt service coverage ratio because it provides an estimate of the cash available to pay down long term debt. Adjusted EBITDA does not represent net income calculated in accordance with GAAP. As such, it should not be considered an alternative to net income as an indication of our operating performance. A reconciliation of Adjusted EBITDA to net income attributable to the controlling interests is in Exhibit 12 – Computation of Ratios.

Funds From Operations

FFO is a widely used measure of operating performance for real estate companies. We provide FFO as a supplemental measure to net income calculated in accordance with GAAP. Although FFO is a widely used measure of operating performance for REITs, FFO does not represent net income calculated in accordance with GAAP. As such, it should not be considered an alternative to net income as an indication of our operating performance. In addition, FFO does not represent cash generated from operating activities in accordance with GAAP, nor does it represent cash available to pay distributions and should not be considered as an alternative to cash flow from operating activities, determined in accordance with GAAP, as a measure of our liquidity. The National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) defines FFO (April, 2002 White Paper) as net income (computed in accordance with GAAP) excluding gains (or losses) from sales of property and impairments of depreciable real estate, if any, plus real estate depreciation and amortization. We consider FFO to be a standard supplemental measure for REITs because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which historically assumes that the value of real estate assets diminishes predictably over time. Since real estate values have instead historically risen or fallen with market conditions, we believe that FFO more accurately provides investors an indication of our ability to incur and service debt, make capital expenditures and fund other needs. Our FFO may not be comparable to FFO reported by other REITs. These other REITs may not define the term in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently.

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The following table provides the calculation of our FFO and a reconciliation of FFO to net income for the three and nine months ended September 30, 2014 and 2013 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014			2013
Net income attributable to the controlling interests	$	3,668	$	5,840		$	109,309		$	18,438
Adjustments:
Depreciation and amortization	24,354		21,168			71,508			63,328
Net gain on sale of real estate	—		—			(106,555		)	(3,195		)
Income from operations of properties sold or held for sale	—		(4,131		)	(546		)	(11,139		)
Funds from continuing operations	28,022		22,877			73,716			67,432
Discontinued operations:
Income from operations of properties sold or held for sale	—		4,131			546			11,139
Depreciation and amortization	—		3,215			—			12,161
Funds from discontinued operations	—		7,346			546			23,300
FFO as defined by NAREIT	$	28,022	$	30,223		$	74,262		$	90,732

Critical Accounting Policies and Estimates

We base the discussion and analysis of our financial condition and results of operations upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We discuss the most critical estimates in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on March 3, 2014.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The principal material financial market risk to which we are exposed is interest-rate risk. Our exposure to market risk for changes in interest rates relates primarily to refinancing long-term fixed rate obligations, the opportunity cost of fixed rate obligations in a falling interest rate environment and our variable rate lines of credit. We primarily enter into debt obligations to support general corporate purposes including acquisition of real estate properties, capital improvements and working capital needs.

As the majority of our outstanding debt is long-term, fixed rate debt, our interest rate risk has not changed significantly from what was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on March 3, 2014. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Debt Financing.”

ITEM 4: CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, Chief Financial Officer and Executive Vice President of Accounting, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer, Chief Financial Officer and Executive Vice President of Accounting, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer, Chief Financial Officer and Executive Vice President of Accounting concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

There have been no changes in Washington REIT’s internal control over financial reporting (as defined by Rule 13a-15(f)) that occurred during the period covered by the report that have materially affected, or are reasonably likely to materially affect, Washington REIT’s internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

None.

ITEM 1A: RISK FACTORS

None.

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3: DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4: MINE SAFETY DISCLOSURES

None.

ITEM 5: OTHER INFORMATION

None.

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ITEM 6: EXHIBITS

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File Number	Exhibit	Filing Date	Filed Herewith
10.52*	Separation Agreement and General Release between James B. Cederdahl and Washington Real Estate Investment Trust dated July 2, 2014	8-K	001-06622	10.1	7/7/2014
10.53*	Separation Agreement and General Release between Thomas L. Regnell and Washington Real Estate Investment Trust dated October 8, 2014	8-K	001-06622	10.1	10/6/2014
10.54*	Executive Officer Severance Pay Plan, adopted August 4, 2014					X
12	Computation of Ratios					X
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (“the Exchange Act”)					X
31.2	Certification of the Executive Vice President – Accounting and Administration pursuant to Rule 13a-14(a) of the Exchange Act					X
31.3	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act					X
32	Certification of the Chief Executive Officer, Executive Vice President – Accounting and Administration and Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
101	The following materials from our Quarterly Report on Form 10–Q for the quarter ended June 30, 2014 formatted in eXtensible Business Reporting Language (“XBRL”): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Shareholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) notes to these consolidated financial statements					X

* Management contracts or compensation plans or arrangements in which trustees or executive officers are eligible to participate.

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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
	/s/ Paul T. McDermott
	Paul T. McDermott
	President and Chief Executive Officer
	/s/ Laura M. Franklin
	Laura M. Franklin
	Executive Vice President Accounting and Administration (Principal Accounting Officer)
	/s/ William T. Camp
	William T. Camp
	Executive Vice President and Chief Financial Officer (Principal Finance Officer)

DATE: October 30, 2014

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EX-10.54

Exhibit 10.54

WASHINGTON REAL ESTATE INVESTMENT TRUST

EXECUTIVE OFFICER SEVERANCE PAY PLAN

(Effective as of August 4, 2014)

WASHINGTON REAL ESTATE INVESTMENT TRUST

EXECUTIVE OFFICER SEVERANCE PAY PLAN

I. Establishment and Purpose. Washington Real Estate Investment Trust (the “Trust”) has adopted the Washington Real Estate Investment Trust Executive Officer Severance Pay Plan (the “Plan”) effective as of August 4, 2014. The Trust intends the Plan to benefit Eligible Employees (as defined below) who incur a Qualifying Termination (as defined below).

The Plan is an unfunded welfare benefit plan for purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and a severance pay plan within the meaning of United States Department of Labor Regulations Section 2510.3-2(b).

II. Purpose. The purpose of the Plan is to provide severance pay and severance benefits to Eligible Employees who satisfy the Plan’s terms and conditions.

III. Defined Terms.

A.    “Affiliate” means any entity which is controlling, controlled by, or under common control with the Trust, as determined by the Trust in its sole discretion.

B.    “Annual Base Salary” means (when capitalized herein) the Eligible Employee’s annual base salary as of the date of Termination of Employment.

C.    “Cause” means (i) commission by the Eligible Employee of a felony or crime of moral turpitude; (ii) conduct by the Eligible Employee in the performance of the Eligible Employee’s duties to the Trust which is illegal, dishonest, fraudulent or disloyal; (iii) the breach by the Eligible Employee of any fiduciary duty the Eligible Employee owes to the Trust; or (iv) gross neglect of duty which is not cured by the Eligible Employee to the reasonable satisfaction of the Trust within thirty (30) days of the Eligible Employee’s receipt of written notice from the Trust advising the Eligible Employee of said gross neglect.

D.    “Eligible Employee” means an officer of the Trust at the level of President and Chief Executive Officer, Executive Vice President or Senior Vice President.

E.    “Good Reason” means (i) the Trust materially diminishes the Eligible Employee’s job responsibilities such that the Eligible Employee would no longer have responsibilities substantially equivalent to those of other officers holding an equivalent job position to that held by the Eligible Employee before the diminution at companies with similar revenues and market capitalization; (ii) the Trust reduces the Eligible Employee’s annual base salary (except for a reduction that is a uniform percentage of annual base salary for each officer of the Trust and does not exceed ten percent (10%) of annual base salary) or annual bonus opportunity at high, target or threshold performance as a percentage of annual base salary; or (iii) the Trust requires the Eligible Employee to relocate the Eligible Employee’s primary place of employment to a new location that is more than fifty (50) miles from its current location (determined using the most direct driving route), without the Eligible Employee’s consent;

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provided however, as to each event in paragraph (i), (ii) or (iii), (1)    the Eligible Employee gives written notice to the Trust within thirty (30) days following the event or receipt of notice of the event of his objection to the event; (2) the Trust fails to remedy the event within thirty (30) days following the Eligible Employee’s written notice; and (3) the Eligible Employee terminates his employment within thirty (30) days following the Trust’s failure to remedy the event.

F.    “Plan Administrator” means the Trust.

G.    “Qualifying Termination” means the Termination of Employment of an Eligible Employee (i) by the Trust without Cause, or (ii) by the Eligible Employee for Good Reason. An Eligible Employee’s Termination of Employment as a result of a disability pursuant to an employee disability plan or policy of the Trust shall not be a Qualifying Termination.

H.    “Separation Agreement” means a separation agreement in the form provided by the Trust in its sole discretion, which among other things, provides for the release and discharge of the Trust and related persons and entities from any and all actions, suits, proceedings, claims, demands or causes of action, in any way directly or indirectly related to or connected with the Eligible Employee’s employment with the Trust and its Affiliates or Termination of Employment, including but not limited to, claims relating to discrimination in employment, but which specifically reserves any right the Eligible Employee may have to accrued benefits under any long-term incentive plan, any short-term incentive plan or any other benefit plan applicable to the Eligible Employee.

I.    “Termination of Employment’ means an Eligible Employee’s “separation from service” within the meaning of Section 409A of the Internal Revenue Code that also is a complete cessation of the Participant’s status as a common law employee of the Trust.

J.    “Week(s) of Pay” means the Eligible Employee’s Annual Base Salary divided by fifty-two (52).

K.    “Years of Service” means the full number of years of employment completed with the Trust by an Eligible Employee as determined in accordance with the methodology used in the Trust’s personnel records for purposes of the Plan.

IV. Eligibility. Except as otherwise provided under the Plan, each Eligible Employee who incurs a Qualifying Termination is eligible to receive severance pay and severance benefits under the Plan. If the Trust or an Eligible Employee initiates Termination of Employment, the party initiating the Termination of Employment shall be required, on or before the date of Termination of Employment, to give notice of termination in writing to the other party, specifying the basis for termination and the effective date of termination. Notice of termination for Cause by the Trust or Good Reason by the Eligible Employee shall specify the facts alleged to constitute termination for Cause or Good Reason, as applicable. An Eligible Employee must return all property (i.e., keys, credit cards, documents and records, identification cards, office equipment, portable computers, car/mobile telephones, parking cards, etc.) of the Trust and Affiliates as of the date of Termination of Employment in order

2

for the Eligible Employee to be eligible to receive any severance pay or severance benefits under the Plan.

V. Severance Pay and Severance Benefits. In exchange for agreeing to and complying with the terms and conditions in the Plan and in the Separation Agreement, each Eligible Employee shall be entitled to receive the severance pay and severance benefits as follows:

A. Severance Pay. An Eligible Employee shall be entitled to receive the severance pay according to Exhibit A, less all applicable payroll and tax withholding.

B. Severance Benefits. An Eligible Employee’s active employee group health coverage shall cease in connection with his or her Termination of Employment and in accordance with the Trust’s group health plan. If an Eligible Employee wishes to continue his or her group health coverage after his or her date of Termination of Employment, he or she may elect to do so pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”). If the Eligible Employee participates in the Trust’s group health plan as of the date of Termination of Employment, the Eligible Employee will receive payment from the Trust equal to the lesser of (i) the Trust’s portion of the group health plan premium or the Trust’s cost of coverage for an active employee for employee only coverage, or (ii) the COBRA premium, in either case for the lesser of the period of severance or the period for which the Eligible Employee maintains continuation coverage under COBRA, less all applicable payroll and tax withholding.

The severance pay and severance benefits provided for in the Plan are in addition to, and do not supersede, any separate legal rights that an Eligible Employee may have to payments or benefits following Termination of Employment, such as under any tax-qualified retirement plan, any deferred compensation plan, any long-term incentive plan, any short-term incentive plan or any other benefit plan in which the Eligible Employee may participate. Notwithstanding the foregoing or any other provision of the Plan, (a) severance pay and severance benefits under the Plan are not intended to duplicate such benefits as workers’ compensation wage replacement benefits, disability benefits, pay-in-lieu-of-notice, severance pay under other benefit plans, severance programs, severance pay under employment contracts, or applicable laws, such as WARN, and should such other benefits be payable, severance pay and severance benefits payable to an Eligible Employee under the Plan will be offset or, alternatively, where otherwise permissible, the Plan Administrator may deem severance pay or severance benefits previously paid under this Plan as having been paid to satisfy such other benefit obligations; (b) if the Eligible Employee is entitled to payment under a separate Change in Control Agreement between the Trust and the Eligible Employee, then the provisions of the Plan shall not apply to the Eligible Employee and the Eligible Employee shall be entitled to no severance pay or severance benefits under the Plan;and (c) with respect to the Chief Executive Officer only, (1) if the letter agreement dated August 19, 2013 between the Trust and the Chief Executive Officer, as it may be amended (the “CEO Employment Agreement”), will provide, determined as of the date of the Chief Executive Officer’s Termination of Employment, a greater aggregate monetary

3

amount of severance pay and severance benefits than the aggregate monetary amount of severance pay and severance benefits under the Plan then the provisions of the Plan shall not apply to the Chief Executive Officer and the Chief Executive Officer shall be entitled to no severance pay or severance benefits under the Plan, and (2) conversely, if the Plan will provide, determined as of the date of the Chief Executive Officer’s Termination of Employment, a greater aggregate monetary amount of severance pay and severance benefits than the aggregate monetary amount of severance pay and severance benefits under the CEO Employment Agreement, then, the aggregate amount of severance pay and severance benefits payable under the Plan shall be reduced by the aggregate amount payable as severance pay and severance benefits under the CEO Employment Agreement. Further, to the extent permitted by applicable law, if an Eligible Employee has any outstanding indebtedness to the Trust or an Affiliate upon or after the date of Termination of Employment, severance pay and severance benefits payable to an Eligible Employee under the Plan will be offset or, alternatively, where otherwise permissible, the Plan Administrator may deem severance pay or severance benefits previously paid under the Plan as having been paid to satisfy such other indebtedness.

VI. Supplemental Severance Benefits. The Trust reserves the right in its sole discretion to (i) pay more severance pay or to provide alternative forms of severance benefits than would otherwise be provided under the Plan and to waive any condition of eligibility or ineligibility that may apply to any person, or (ii) provide as a form of severance pay under the Plan the economic equivalent of any bonus or incentive award (long-term or short-term incentive) that an individual would otherwise not be eligible for as a result of his or her Termination of Employment, notwithstanding any provision of this Plan to the contrary, except in either case to the extent that any such action would cause the Plan to cease to qualify in part for the short-term deferral rules in Treas. Regs. Section 1.409A-1(b)(4) or the separation pay rules in Treas. Regs. Section 1.409A-1(b)(9)(iii) or would otherwise cause an amount to be taxable under Section 409A of the Internal Revenue Code.

VII. Payment of Severance. The Trust shall pay the severance pay described in Article VI(A) in a lump sum payment promptly following the date that the Separation Agreement becomes irrevocable and before March 15 of the calendar year following the calendar year in which the Eligible Employee’s Termination of Employment occurs.The Trust shall pay the severance benefits described in Article VI(B) in substantially equal monthly installments commencing within 60 days following the date of Termination of Employment, with the first installment to include all monthly installments accrued from the date of Termination of Employment to the date of the first payment Notwithstanding any other provision of the Plan, (i) to the extent the severance pay would constitute a deferral of compensation within the meaning of Section 409A of the Internal Revenue Code, the severance pay shall be paid within 60 days following Termination of Employment, or if later, (a) in the case of any Eligible Employee who is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code (a “Specified Employee”), six (6) months after the Eligible Employee’s “separation from service” within the meaning of Section 409A of the Internal Revenue Code, or (b) in the case of any Eligible Employee who is not a Specified Employee, if the Termination of Employment occurs upon or after November 2 of a calendar year, in

4

the following calendar year; and (ii) to the extent the severance benefits would constitute a deferral of compensation within the meaning of Section 409A of the Internal Revenue Code, the severance benefits shall be paid, if later than the foregoing schedule of monthly installments, (a) in the case of any Eligible Employee who is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code (a “Specified Employee”), six (6) months after the Eligible Employee’s “separation from service” within the meaning of Section 409A of the Internal Revenue Code, or (b) in the case of any Eligible Employee who is not a Specified Employee, if the Termination of Employment occurs upon or after November 2 of a calendar year, in the following calendar year. The Trust shall deduct from the severance pay and severance benefits all legally required taxes and any sums the Eligible Employee owes to the Trust. If an Eligible Employee dies before receiving full payment of his or her severance pay and severance benefits, the balance of the Eligible Employee’s severance pay and severance benefits shall be paid to his or her estate.

VIII. Separation Agreement. In order to receive the severance pay and severance benefits available under the Plan, an Eligible Employee must submit the signed Separation Agreement to the Plan Administrator within the applicable time frame stated in the Separation Agreement.An Eligible Employee may revoke the signed Separation Agreement within the revocation period (if any) provided in the Separation Agreement. The period within which the Eligible Employee may sign and revoke the Separation Agreement will end within 60 days after Termination of Employment or such shorter period as the Plan Administrator may provide in the Separation Agreement.

Any such revocation must be made in writing and must be received by the Plan Administrator within the revocation period (if any) provided in the Separation Agreement. An Eligible Employee who timely revokes the Separation Agreement shall not be eligible to receive any severance pay or severance benefits available under the Plan.

Each Eligible Employees is advised to contact his or her personal attorney at his or her own expense to review the Separation Agreement form if he or she so desires.

IX. Outplacement. The Trust may provide outplacement assistance on a discretionary basis.

X. Plan Administration. The Plan Administrator shall have the discretionary authority to determine coverage and eligibility for Plan benefits and to construe the terms of the Plan, including making factual determinations. The decisions of the Plan Administrator shall be final and conclusive with respect to all questions concerning the administration of the Plan. No benefits are payable under the Plan unless the Plan Administrator determines, in its sole discretion, that a person is entitled to such benefits.

The Plan Administrator may delegate to other persons the responsibility for performing certain duties of the Plan Administrator under the terms of the Plan and may seek such expert advice as the Plan Administrator deems reasonably necessary with respect to the Plan. The Plan Administrator shall be entitled to rely upon the information and advice furnished by such delegates and experts, unless actually knowing such information and advice to be inaccurate or unlawful.

5

In the event of a group termination, as determined in the sole discretion of the Plan Administrator, the Plan Administrator shall furnish affected Eligible Employees with such additional information as may be required by law.

XI. Claims Procedures. Itis not necessary that an Eligible Employee apply for benefits under the Plan. However, an Eligible Employee may file a written claim with the Plan Administrator if the Eligible Employee believes he or she did not receive all benefits to which he or she is entitled under the Plan. An Eligible Employee should direct all claims and other communications that are directed to the Plan Administrator to the Trust’s Human Resources department. The written claim must be filed within sixty (60) days of the Eligible Employee’s Termination of Employment. In the event that a claim is denied, the Plan Administrator shall provide to the claimant written notice of the denial within ninety (90) days after the Plan Administrator receives the claim, unless special circumstances require an extension of time for processing the claim. If such an extension of time is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90-day period. In no event shall the extension exceed a period of ninety (90) days from the end of such initial period. Any extension notice shall indicate the special circumstances requiring the extension of time, the date by which the Plan Administrator expects to render the final decision, the standards on which entitlement to benefits are based, the unresolved issues that prevent a decision on the claim and the additional information needed to resolve those issues.

A. Notice of Denial. If an Eligible Employee is denied a claim for benefits under the Plan, the Plan Administrator shall provide to such claimant written notice of the denial which shall set forth:

(i)    the specific reasons for the denial;

(ii) specific references to the pertinent provisions of the Plan on which the denial is based;

(iii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and

(iv) an explanation of the Plan’s claim review procedures, and the time limits applicable to such procedures.

B. Right to Review. After receiving written notice of the denial of a claim, a claimant or his or her representative shall be entitled to:

(i) request a full and fair review of the denial of the claim by written application to the Plan Administrator;

(ii) request, free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim;

6

(iii) submit written comments, documents, records, and other information relating to the denied claim to the Plan Administrator; and

(iv) a review that takes into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

C. Application for Review. If a claimant wishes a review of the decision denying his or her claim to benefits under the Plan, he or she must submit the written application to the Plan Administrator within sixty (60) days after receiving written notice of the denial.

D. Hearing. Upon receiving such written application for review, the Plan Administrator may schedule a hearing for purposes of reviewing the claimant’s claim, which hearing shall take place not more than thirty (30) days from the date on which the Plan Administrator received such written application for review.

E Notice of Hearing. At least ten (10) days prior to the scheduled hearing, the claimant and his or her representative designated in writing by him or her, if any, shall receive written notice of the date, time, and place of such scheduled hearing.  The claimant or his or her representative, if any, may request that the hearing be rescheduled, for the claimant’s convenience, on another reasonable date or at another reasonable time or place.

F. Counsel. All claimants requesting a review of the decision denying their claim for benefits may employ counsel for purposes of the hearing.

G. Decision on Review. No later than sixty (60) days following the receipt of the written application for review, the Plan Administrator shall submit its decision on the review in writing to the claimant involved and to his or her representative, if any, unless the Plan Administrator determines that special circumstances (such as the need to hold a hearing) require an extension of time, to a day no later than one hundred twenty (120) days after the date of receipt of the written application for review. If the Plan Administrator determines that the extension of time is required, the Plan Administrator shall furnish to the claimant written notice of the extension before the expiration of the initial sixty (60) day period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render its decision on review. In the case of a decision adverse to the claimant, the Plan Administrator shall provide to the claimant written notice of the denial which shall include:

(i) the specific reasons for the decision;

(ii) specific references to the pertinent provisions of the Plan on which the decision is based;

7

(iii) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits; and

(iv) an explanation of the Plan’s claim review procedures, and the time limits applicable to such procedures, including a statement of the claimant’s right to bring an action under Section 502(a) of ERISA following the denial of the claim upon review.

H. Filing a Claim. No claim may be filed with a court regarding a denial of a claim for benefits under the Plan until the Eligible Employee has exhausted the administrative review procedures under the Plan as set forth in this Article XI. All claims for benefits denied under the Plan must be brought in a federal court for Rockville, Maryland, within ninety (90) days after the Eligible Employee receives his or her decision on review pursuant to Article XI(G).

XII. Amendment/ Termination/ Vesting. Eligible Employees do not have any vested right to severance pay or severance benefits. The Trust reserves the right in its sole discretion to amend, suspend, revoke or terminate the Plan at any time, retroactively or otherwise. Upon termination of the Plan, the Plan shall immediately cease and no severance pay or severance benefits shall be provided hereunder, except as may otherwise be determined by the Trust with respect to Qualifying Terminations that occurred before the effective date of termination of the Plan.

XIII. No Assignment. Severance pay and severance benefits shall not be subject to anticipation, alienation, pledge, sale, transfer, assignment, garnishment, attachment, execution, encumbrance, levy, lien or charge, and any attempt to do so shall be void, except to the extent required by law.

XIV. Recovery of Payments Made by Mistake. An individual shall be required to return to the Trust any severance pay and severance benefits the Trust paid or made available to an individual by a mistake of fact or law. The Trust reserves the right to pursue such recovery of payments by any legal or equitable means available.

XV. Representations Contrary to the Plan. No employee, officer, trustee, director or agent of the Trust has the authority to alter, vary or modify the terms of the Plan except by means of an authorized written amendment to the Plan by the Trust. No verbal or written representations contrary to the terms of the Plan and its written amendments shall be binding upon the Plan, the Plan Administrator, or the Trust.

XVI. No Employment Rights. The Plan shall not confer employment rights upon any person. No person shall be entitled, by virtue of the Plan, to remain in the employ of the Trust and nothing in the Plan shall restrict the right of the Trust to alter or terminate the employment of any Eligible Employee or other person at any time.

8

XVII. Plan Funding. No Eligible Employee shall acquire by reason of the Plan any right in or title to any assets, funds or property of the Trust or an Affiliate. Any severance pay that becomes payable under the Plan is an unfunded obligation of the Trust and shall be paid from the Trust’s general assets. No employee, officer, trustee, director or agent of the Trust guarantees in any manner the payment of severance pay or the availability of severance benefits.

XVIII. Applicable Law. The laws of the State of Maryland (without regard to the choice of law provisions thereof) shall govern the Plan except where federal law preempts state law.

XIX. Section 409A. All severance pay and severance benefits paid pursuant to the Plan are intended to be exempt from Section 409A of the Internal Revenue Code to the maximum extent possible, and compliant with Section 409A to the extent payments under the Plan are not exempt from Section 409A, and the Plan shall be interpreted and construed consistently with such intent. In that regard, payments are intended to qualify as short-term deferrals pursuant to Treas. Regs. Section 1.409A-1(b)(4) to the maximum extent possible, and thereafter, as separation pay pursuant to Treas. Regs. Section 1.409A-1(b)(9)(iii) to the maximum extent possible. Under no circumstances, however, shall the Trust or any of its employees, officers, trustees, directors, service providers or agents have any liability to any person for any taxes, penalties or interest due on amounts paid or payable under the Plan, including any taxes, penalties or interest imposed under Section 409A of the Internal Revenue Code. Each payment made pursuant to this Plan shall be considered a separate payment in accordance with Treas. Regs. Section 1.409A-2(b)(2).

XX. Severability. If any provision of the Plan is found, held or deemed by the Plan Administrator or a court of competent jurisdiction to be void, unlawful or unenforceable under any applicable statute or other controlling law, the remainder of the Plan shall continue in full force and effect.

XXI. Plan Year. The Plan Year of the Plan shall be the calendar year.

XXII. Mandated Benefits. To the extent that a federal, state or local law mandates that the Trust make a payment to an Eligible Employee because of involuntary termination of employment or in accordance with a plant closing law, the severance pay and severance benefits available under the Plan shall be reduced by the amount of such mandated payment.

9

WASHINGTON REAL ESTATE INVESTMENT TRUST
By:	/s/ Laura M. Franklin
Title:	Executive Vice President - Accounting and Administration

10

EXHIBIT A

Washington Real Estate Investment Trust Executive Officer Severance Pay Plan Matrix

	Annual Base Salary
Years of Service	$170K - $225K	$225K+
<1year	12	14
1-4 years	16	18
5 years	18	20
6 years	20	22
7 years	22	24
8 years	24	26
9 years	26	28
10 years	28	30
11 years	30	32
12 years	32	34
13 years	34	36
14 years	36	38
15 years	38	40
16 years	40	42
17 years	42	44
18 years	44	46
19 years	46	48
20 years	48	50
21 years	50	52
22 years or more	52	52

The numbers in the columns under the dollar amounts of Annual Base Salary are references to Weeks of Pay that will be paid as severance pay under the Plan.

EX-12

Exhibit 12

WASHINGTON REAL ESTATE INVESTMENT TRUST

Computation of Ratios

(In thousands)

Earnings to fixed charges ratio:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Income from continuing operations	$	3,658		$	1,709		$	2,761		$	4,104
Additions:
Fixed charges
Interest expense	15,087			15,930			44,602			47,944
Capitalized interest	591			124			1,445			607
	15,678			16,054			46,047			48,551
Deductions:
Capitalized interest	(591		)	(124		)	(1,445		)	(607		)
Net loss attributable to noncontrolling interests	10			—			17			—
Adjusted earnings	18,755			17,639			47,380			52,048
Fixed charges (from above)	$	15,678		$	16,054		$	46,047		$	48,551
Ratio of earnings to fixed charges	1.20			1.10			1.03			1.07

Debt service coverage ratio:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014			2013
Net income attributable to the controlling interests	$	3,668	$	5,840	109,309			$	18,438
Additions:
Interest expense (1)	15,087		16,259		44,602			48,929
Real estate depreciation and amortization (1)	24,354		24,383		71,508			75,489
Income tax expense	46		6		117			30
Non-real estate depreciation	113		203		486			614
	39,600		40,851		116,713			125,062
Deductions:
Gain on sale of real estate (1)	—		—		(106,555		)	(3,195		)
Adjusted EBITDA	43,268		46,691		119,467			140,305
Debt service
Interest expense	15,087		16,259		44,602			48,929
Principal amortization	1,065		823		2,860			2,466
	$	16,152	$	17,082	$	47,462		$	51,395
Debt service coverage ratio	2.68		2.73		2.52			2.73
(1) Includes discontinued operations

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Paul T. McDermott, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Washington Real Estate Investment Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

DATE:	October 30, 2014	/s/ Paul T. McDermott
		Paul T. McDermott
		Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Laura M. Franklin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Washington Real Estate Investment Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

DATE:	October 30, 2014	/s/ Laura M. Franklin
		Laura M. Franklin
		Executive Vice President
		Accounting and Administration
		(Principal Accounting Officer)

EX-31.3

Exhibit 31.3

CERTIFICATION

I, William T. Camp, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Washington Real Estate Investment Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

DATE:	October 30, 2014	/s/ William T. Camp
		William T. Camp
		Chief Financial Officer
		(Principal Financial Officer)

EX-32

Exhibit 32

WRITTEN STATEMENT OF

CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, the President and Chief Executive Officer, the Executive Vice President Accounting, Administration and Corporate Secretary, and the Chief Financial Officer of Washington Real Estate Investment Trust (“Washington REIT”), each hereby certifies on the date hereof, that:

(a) the Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13 (a) or 15(d) of the Securities Exchange Act of 1934; and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Washington REIT.

DATE:	October 30, 2014	/s/ Paul T. McDermott
		Paul T. McDermott
		Chief Executive Officer
DATE:	October 30, 2014	/s/ Laura M. Franklin
		Laura M. Franklin
		Executive Vice President
		Accounting and Administration
		(Principal Accounting Officer)
DATE:	October 30, 2014	/s/ William T. Camp
		William T. Camp
		Chief Financial Officer
		(Principal Financial Officer)

XML

Earnings per Common Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Earnings Per Share [Abstract]
Income from continuing operations	$ 3,658	$ 1,709	$ 2,761	$ 4,104
Less: Net income attributable to noncontrolling interests in subsidiaries	10	0	17	0
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic	44	32	(11)	83
Adjusted income from continuing operations attributable to the controlling interests	3,624	1,677	2,789	4,021
Income from discontinued operations, including gain on sale of real estate, net of taxes	0	4,131	106,531	14,334
Allocation of earnings to unvested restricted share awards	0	(77)	(335)	(288)
Adjusted income from discontinuing operations attributable to the controlling interests	0	4,054	106,196	14,046
Adjusted net income attributable to the controlling interests	$ 3,624	$ 5,731	$ 108,985	$ 18,067
Weighted average shares outstanding - basic (in shares)	66,738	66,410	66,725	66,403
Effect of dilutive securities: Operating partnership units	0	117	0	117
Effect of dilutive securities: Employee stock options and restricted share awards	52	34	35	25
Weighted average shares outstanding - diluted (in shares)	66,790	66,561	66,760	66,545
Earnings per common share, basic, Continuing operations (in dollars per share)	$ 0.05	$ 0.03	$ 0.04	$ 0.06
Earnings per common share, basic, Discontinued operations (in dollars per share)	$ 0.00	$ 0.06	$ 1.59	$ 0.21
Net income per share (in dollars per share)	$ 0.05	$ 0.09	$ 1.63	$ 0.27
Earnings per common share, diluted, Continuing operations (in dollars per share)	$ 0.05	$ 0.03	$ 0.04	$ 0.06
Earnings per common share, diluted, Discontinued operations (in dollars per share)	$ 0.00	$ 0.06	$ 1.59	$ 0.21
Net income per share (in dollars per share)	$ 0.05	$ 0.09	$ 1.63	$ 0.27

XML

Unsecured Lines of Credit Payable - Line of Credit Facility, Increase (decrease), net (Details) (USD $) In Thousands, unless otherwise specified			9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Credit Facility No. 1 Line of Credit
Line of Credit Facility, Increase (Decrease) During the Period [Roll Forward]
Balance at December 31, 2013	$ 5,000	$ 0	$ 0
Borrowings			5,000
Balance at September 30, 2014	$ 5,000	$ 0	$ 5,000

XML

Real Estate - Acquisitions (Details) (USD $)	3 Months Ended		9 Months Ended			9 Months Ended				3 Months Ended		9 Months Ended		3 Months Ended	9 Months Ended		12 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 note	Sep. 30, 2013	Dec. 31, 2013	Sep. 30, 2014 Tenant Origination Costs Member	Sep. 30, 2014 Leasing Commissions Absorption Costs Member	Sep. 30, 2014 Net Lease Intangible Assets Member	Sep. 30, 2014 Net Lease Intangible Liabilities Member	Sep. 30, 2014 Pro Forma [Member]	Sep. 30, 2013 Pro Forma [Member]	Sep. 30, 2014 Pro Forma [Member]	Sep. 30, 2013 Pro Forma [Member]	Sep. 30, 2014 Property Acquired [Member]	Sep. 30, 2014 Property Acquired [Member] sqft	Sep. 30, 2014 Property Acquired [Member] Yale West	Dec. 31, 2013 Property Acquired [Member] Yale West	Sep. 30, 2014 Property Acquired [Member] The Army Navy Club Building sqft	Sep. 30, 2014 Property Acquired [Member] 1775 Eye Street [Member] sqft
Real Estate Properties [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired																Feb. 21, 2014		Mar. 26, 2014	May 01, 2014
Real Estate, Type of Property, Multifamily																Multifamily
Real Estate, Type of Property, Office																		Office	Office
Square Footage Of Real Estate Property Acquired															293,000			108,000	185,000
Real Estate Investment Property, at Cost	$ 2,387,611,000		$ 2,387,611,000		$ 2,102,227,000									$ 256,500,000	$ 256,500,000	$ 73,000,000		$ 79,000,000	$ 104,500,000
Real estate rental revenue	73,413,000	65,828,000	214,278,000	196,303,000						73,413,000	71,004,000	219,192,000	211,662,000	5,089,000	10,444,000
Net Investment Income														(640,000)	(2,752,000)
Payments to Acquire Land Held-for-use			93,567,000
Payments to Acquire Buildings			141,456,000
Tenant origination costs	8,354,000		8,354,000
Leasing commissions absorption costs	12,847,000		12,847,000
Net lease intangible assets	7,331,000		7,331,000
Net lease intangible liabilities	(2,122,000)		(2,122,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt	(107,125,000)		(107,125,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	932,000		932,000
Total property purchase price			155,240,000
Weighted Average Useful Life						71 months	54 months	72 months	82 months
Payments to Acquire Real Estate			154,126,000	0
Number of Mortgage Notes Assumed			2
Notes Assumed			100,900,000
Payments for Escrow Deposit																	3,600,000		1,900,000
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest	3,658,000	1,709,000	2,761,000	4,104,000						3,668,000	477,000	1,960,000	449,000
Net income attributable to the controlling interests	$ 3,668,000	$ 5,840,000	$ 109,309,000	$ 18,438,000						$ 3,668,000	$ 4,608,000	$ 108,492,000	$ 14,783,000
Diluted Earnings Per Share Pro Forma										$ 0.05	$ 0.07	$ 1.62	$ 0.22

XML

Fair Value Disclosures - Financial Assets and Liabilities Measured at Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets: SERP	$ 2,616	$ 3,290
Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets: SERP	0	0
Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets: SERP	2,616	3,290
Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets: SERP	$ 0	$ 0

XML

Real Estate

9 Months Ended

Sep. 30, 2014

Real Estate [Abstract]

Real Estate

NOTE 3: REAL ESTATE

Acquisitions

Washington REIT acquired the following properties during the 2014 Period:

			Rentable	Contract Purchase Price
Acquisition Date	Property Name	Type	Square Feet	(in thousands)
February 21, 2014	Yale West (216 units)	Multifamily	N/A	$	73,000
March 26, 2014	The Army Navy Club Building	Office	108,000	79,000
May 1, 2014	1775 Eye Street, NW	Office	185,000	104,500
			293,000	$	256,500

The results of operations from the acquired operating properties are included in the consolidated statements of income as of their acquisition dates.

The revenue and earnings of our 2014 acquisitions are as follows (amounts in thousands):

	Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014
Real estate rental revenue	$	5,089		$	10,444
Net loss	(640		)	(2,752		)

We record the acquired physical assets (land, building and tenant improvements), and in-place leases (absorption, tenant origination costs, leasing commissions and net lease intangible assets/liabilities), and any other assets or liabilities at their fair values.

We have recorded the total purchase price of the above acquisitions as follows (in thousands):

Land	$	93,567
Buildings	141,456
Tenant origination costs	8,354
Leasing commissions/absorption costs	12,847
Net lease intangible assets	7,331
Net lease intangible liabilities	(2,122		)
Fair value of assumed mortgages	(107,125		)
Furniture fixtures and equipment	932
Total	$	155,240

The weighted remaining average life for the 2014 acquisition components above, other than land and building, are 71 months for tenant origination costs, 54 months for leasing commissions/absorption costs, 72 months for net lease intangible assets and 82 months for net lease intangible liabilities.

The difference in the total contract purchase price of $256.5 million for the 2014 acquisitions and the acquisition cost per the consolidated statement of cash flows of $154.1 million is primarily due to the assumption of two mortgage notes secured by Yale West and The Army Navy Club Building for an aggregate $100.9 million and the payment of a $3.6 million deposit for Yale West in 2013, partially offset by a credit to the seller for building renovations at 1775 Eye Street, NW for $1.9 million.

The following unaudited pro-forma combined condensed statements of operations are for the 2014 and 2013 Quarters and Periods as if the above described acquisitions had occurred at the beginning of the period of acquisition and the same period in the year prior to acquisition. The unaudited pro-forma information does not purport to be indicative of the results that actually would have occurred if the acquisitions had been in effect for the 2014 and 2013 Quarters and Periods. The unaudited data presented is in thousands, except per share data.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Real estate rental revenue	$	73,413	$	71,004	$	219,192	$	211,662
Income from continuing operations	3,668		477		1,960		449
Net income	3,668		4,608		108,492		14,783
Diluted earnings per share	0.05		0.07		1.62		0.22

Redevelopment

In the office segment, we have an active redevelopment project to renovate 7900 Westpark Drive. Our total investment in the renovation at 7900 Westpark Drive is expected to be $35.0 million. As of September 30, 2014 and December 31, 2013, we had invested $18.4 million and $3.6 million, respectively, in the renovation. We anticipate completion during the first quarter of 2015.

Variable Interest Entities

In June 2011, we executed a joint venture operating agreement with a real estate development company to develop The Maxwell, a mid-rise multifamily property at 650 North Glebe Road in Arlington, Virginia. We estimate the total cost of the project to be $49.9 million. During the first quarter of 2013, we secured third-party debt financing for approximately 70% of the project's cost. Washington REIT is the 90% owner of the joint venture and will have management and leasing responsibilities when the project is completed and stabilized (defined as 90% of the residential units leased). The real estate development company owns 10% of the joint venture and is responsible for the development and construction of the property. The joint venture currently expects to complete this development project during the fourth quarter of 2014.

In November 2011, we executed a joint venture operating agreement with a real estate development company to develop a high-rise multifamily property at 1225 First Street (formerly 1219 First Street) in Alexandria, Virginia. We estimate the total cost of the project to be $95.3 million, with approximately 70% of the project financed with debt. Washington REIT is the 95% owner of the joint venture and will have management and leasing responsibilities if the project is completed and stabilized. The real estate development company owns 5% of the joint venture and is responsible for the development and construction of the property. In the first quarter of 2013, we decided to delay commencement of construction due to market conditions and concerns of oversupply. We continue to reassess this project on a periodic basis going forward.

We have determined that The Maxwell and 1225 First Street joint ventures are VIE's primarily based on the fact that the equity investment at risk is not sufficient to permit either entity to finance its activities without additional financial support. We expect that 70% of the total development costs for each project would be financed through debt. We have also determined that Washington REIT is the primary beneficiary of each VIE due to the fact that Washington REIT is providing 90%to 95%of the equity contributions and will manage each property after stabilization.

We include the joint venture land acquisitions on our consolidated balance sheets in properties under development or held for future development. As of September 30, 2014 and December 31, 2013, the land and capitalized development costs are as follows (in thousands):

	September 30, 2014		December 31, 2013
The Maxwell	$	47,084	$	27,343
1225 First Street	20,807		20,788

As of September 30, 2014 and December 31, 2013, the accounts payable and accrued liabilities related to the joint ventures are as follows (in thousands):

	September 30, 2014		December 31, 2013
The Maxwell	$	6,253	$	1,785
1225 First Street	76		39

On February 21, 2013, Washington REIT, through its consolidated joint venture to develop The Maxwell, entered into a construction loan agreement with Citizens Bank for $33.0 million. The loan bears interest at LIBOR plus 2.15%, which decreases to LIBOR plus 2.0% upon completion of construction and the joint venture not being in default. The loan matures on February 21, 2016, with twoone year extension options exercisable by the joint venture, subject to fees and compliance with certain provisions in the loan agreement. As of September 30, 2014 and December 31, 2013, the consolidated joint venture had $21.4 million and $7.3 million, respectively, outstanding on this construction loan agreement.

Discontinued Operations

We dispose of assets that no longer meet our long-term strategy or return objectives and where market conditions for sale are favorable. The proceeds from the sales may be reinvested into other properties, used to fund development operations or to support other corporate needs, or distributed to our shareholders. Properties are considered held for sale when they meet the criteria specified (see "Discontinued Operations" in note 2 of the consolidated financial statements included in Washington REIT's Annual Report on Form 10-K for the year ended December 31, 2013). Depreciation on these properties is discontinued at that time, but operating revenues, other operating expenses and interest continue to be recognized until the date of sale.

In September 2013, we entered into four separate purchase and sale agreements to effectuate the sale of our entire medical office segment (including land held for development at 4661 Kenmore Avenue) and two office buildings (Woodholme Center and 6565 Arlington Boulevard) for an aggregate purchase price of $500.8 million. The sale was structured as four transactions. Transactions I and II closed in November 2013 and Transactions III and IV closed in January 2014.

The results of our medical office segment are summarized as follows (amounts in thousands, except per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Real estate rental revenue	$	—	$	10,889	$	892	$	32,928
Net income	—		3,820		546		10,080
Basic net income per share	—		0.06		0.01		0.15
Diluted net income per share	—		0.06		0.01		0.15

We sold the following properties in 2014 and 2013:

Property Name	Segment	Rentable Square Feet	Contract Purchase  Price (in thousands)		Gain on Sale (in thousands)
Medical Office Portfolio Transactions III & IV (1)	Medical Office	427,000	$	193,561	$	105,985
5740 Columbia Road (2)	Retail	3,000	1,600		570
	Total 2014	430,000	$	195,161	$	106,555
Atrium Building	Office	79,000	$	15,750	$	3,195
Medical Office Portfolio Transactions I & II (3)	Medical Office / Office	1,093,000	307,189		18,949
	Total 2013	1,172,000	$	322,939	$	22,144

⁽¹⁾  Woodburn Medical Park I and II and Prosperity Medical Center I, II and III.

⁽²⁾ This property is classified as continuing operations in accordance with ASU No. 2014-08 (see note 2).

⁽³⁾  2440 M Street, 15001 Shady Grove Road, 15505 Shady Grove Road, 19500 at Riverside Park (formerly Lansdowne Medical Office Building), 9707 Medical Center Drive, CentreMed I and II, 8301 Arlington Boulevard, Sterling Medical Office Building, Shady Grove Medical Village II, Alexandria Professional Center, Ashburn Farm Office Park I, Ashburn Farm Office Park II, Ashburn Farm Office Park III, Woodholme Medical Office Building, two office properties (6565 Arlington Boulevard and Woodholme Center) and undeveloped land at 4661 Kenmore Avenue.

As of September 30, 2014 and December 31, 2013, investment in real estate for properties sold or held for sale, all of which were in the medical office segment, was as follows (in thousands):

	September 30, 2014		December 31, 2013
Investment in real estate sold or held for sale	$	—	$	125,967
Less accumulated depreciation	—		(46,066		)
Investment in real estate sold or held for sale, net	$	—	$	79,901

Income from operations of properties sold or held for sale for the three and nine months ended September 30, 2014 and 2013 was as follows (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014			2013
Real estate rental revenue	$	—	$	12,073		$	892		$	37,141
Real estate expenses	—		(4,398		)	(346		)	(12,856		)
Depreciation and amortization	—		(3,215		)	—			(12,161		)
Interest expense	—		(329		)	—			(985		)
Income from operations of properties sold or held for sale	$	—	$	4,131		$	546		$	11,139

Income from operations of properties sold or held for sale by property for the three and nine months ended September 30, 2014 and 2013 was as follows (in thousands):

		Three Months Ended September 30,				Nine Months Ended September 30,
Property	Segment	2014		2013		2014		2013
Atrium Building	Office	$	—	$	—	$	—	$	185
Medical Office Portfolio	Medical Office / Office	—		4,131		546		10,954
		$	—	$	4,131	$	546	$	11,139

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Real Estate - Income statement results of assets held for sale (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Impact of potential sale on operating results
Real estate revenues	$ 73,413	$ 65,828	$ 214,278	$ 196,303
Net income	3,668	5,840	109,309	18,438
Basic net income per share (in dollars per share)	$ 0.05	$ 0.09	$ 1.63	$ 0.27
Diluted net income per share (in dollars per share)	$ 0.05	$ 0.09	$ 1.63	$ 0.27
Medical Office [Member]
Impact of potential sale on operating results
Real estate revenues	0	10,889	892	32,928
Net income	$ 0	$ 3,820	$ 546	$ 10,080
Basic net income per share (in dollars per share)	$ 0.00	$ 0.06	$ 0.01	$ 0.15
Diluted net income per share (in dollars per share)	$ 0.00	$ 0.06	$ 0.01	$ 0.15

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Real Estate - Discontinued Operations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended	1 Months Ended			3 Months Ended				9 Months Ended		12 Months Ended	1 Months Ended			3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014 sqft	Sep. 30, 2013	Sep. 30, 2014 sqft	Sep. 30, 2013	Dec. 31, 2013 sqft	Sep. 30, 2013 Medical Office Porfolio [Member] agreements	Sep. 30, 2014 Medical Office Building [Member] Medical Office Portfolio Transactions III & IV [Member] sqft		Sep. 30, 2014 Retail [Member] Gateway 7-11 [Member] sqft		Sep. 30, 2014 Office [Member] Atrium Building [Member]	Sep. 30, 2013 Office [Member] Atrium Building [Member]	Sep. 30, 2014 Office [Member] Atrium Building [Member]	Sep. 30, 2013 Office [Member] Atrium Building [Member]	Dec. 31, 2013 Office [Member] Atrium Building [Member] sqft	Sep. 30, 2013 Office [Member] Medical Office Porfolio [Member] buildings	Sep. 30, 2014 Medical Office And Office Building [Member] Medical Office Portfolio Transactions III & IV [Member]		Sep. 30, 2014 Medical Office And Office Building [Member] Medical Office Porfolio [Member]	Sep. 30, 2013 Medical Office And Office Building [Member] Medical Office Porfolio [Member]	Sep. 30, 2014 Medical Office And Office Building [Member] Medical Office Porfolio [Member]	Sep. 30, 2013 Medical Office And Office Building [Member] Medical Office Porfolio [Member]	Dec. 31, 2013 Medical Office And Office Building [Member] Medical Office Portfolio Transactions I & II [Member] sqft
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of Purchase and Sale Agreements						4
Number of Buildings Sold																2
Rentable Square Feet	430,000		430,000		1,172,000		427,000	[1]	3,000	[2]					79,000								1,093,000	[3]
Disposal Group, Not Discontinued Operation, Sale Price									$ 1,600	[2]
Contract sale price	195,161		195,161		322,939		193,561	[1]							15,750		193,600	[1]	500,800		500,800		307,189	[3]
Disposal Group, including discontinued operation, gain (loss) on sale of real estate			106,555
Gains (Losses) on Sales of Investment Real Estate									570	[2]
Gain on sale of real estate	0	0	105,985	3,195	22,144										3,195								18,949	[3]
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Real estate rental revenue	0	12,073	892	37,141
Real estate expenses	0	(4,398)	(346)	(12,856)
Depreciation and amortization	0	(3,215)	0	(12,161)
Interest expense	0	(329)	0	(985)
Income from operations of properties sold or held for sale	$ 0	$ 4,131	$ 546	$ 11,139							$ 0	$ 0	$ 0	$ 185					$ 0	$ 4,131	$ 546	$ 10,954

[1] Woodburn Medical Park I and II and Prosperity Medical Center I, II and III.

[2] This property is classified as continuing operations in accordance with ASU No. 2014-08 (see note 2).

[3] 2440 M Street, 15001 Shady Grove Road, 15505 Shady Grove Road, 19500 at Riverside Park (formerly Lansdowne Medical Office Building), 9707 Medical Center Drive, CentreMed I and II, 8301 Arlington Boulevard, Sterling Medical Office Building, Shady Grove Medical Village II, Alexandria Professional Center, Ashburn Farm Office Park I, Ashburn Farm Office Park II, Ashburn Farm Office Park III, Woodholme Medical Office Building, two office properties (6565 Arlington Boulevard and Woodholme Center) and undeveloped land at 4661 Kenmore Avenue

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Real Estate - Assets and liabilities of real estate held for sale (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract]
Investment in real estate sold or held for sale, net	$ 0	$ 125,967
Less accumulated depreciation	0	(46,066)
Investment in real estate sold or held for sale, net	$ 0	$ 79,901

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Mortgage Notes Payable (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended		1 Months Ended		1 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Feb. 28, 2014 Mortgage Note Payable Yale West	Feb. 21, 2014 Mortgage Note Payable Yale West	Mar. 31, 2014 Mortgage Note Payable The Army Navy Club Building	Sep. 30, 2014 Mortgage Note Payable The Army Navy Club Building	Mar. 26, 2014 Mortgage Note Payable The Army Navy Club Building
Debt Instrument [Line Items]
Noncash or Part Noncash Acquisition, Debt Assumed	$ 100,861	$ 0	$ 48,200		$ 52,700
Interest rate, stated percentage			5.55%			3.45%
Debt Instrument, Interest Rate, Basis for Effective Rate				3.75%			3.18%
Mortgage notes payable, Fair Value			$ 54,000			$ 53,200

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Summary of Significant Accounting Policies and Basis of Presentation

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies and Basis of Presentation

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Significant Accounting Policies

We have prepared our consolidated financial statements using the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2013.

New Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the requirements for reporting discontinued operations. Specifically, under this ASU only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. The primary impact of this ASU is that we are no longer required to report the disposal of every operating property in discontinued operations. Adoption of this ASU is required for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after after December 15, 2014, and interim periods within those years. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. We early adopted this ASU effective for the first quarter of 2014.

In June 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which creates a single source of revenue guidance. The new standard provides accounting guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers (unless the contracts are in the scope of other U.S. generally accepted accounting principles (“GAAP”) requirements, such as the leasing literature). The guidance also provides a model for the measurement and recognition of gains and losses on the sale of certain nonfinancial assets, such as property and equipment, including real estate. The new standard is effective for public entities for fiscal years beginning after December 15, 2016 and for interim periods therein. Early adoption is not permitted for public entities. We are currently evaluating the impact the new standard may have on Washington REIT.

Principles of Consolidation and Basis of Presentation

The accompanying unaudited consolidated financial statements include the consolidated accounts of Washington REIT, our majority-owned subsidiaries and entities in which Washington REIT has a controlling interest, including where Washington REIT has been determined to be a primary beneficiary of a variable interest entity (“VIE”). See note 3 for additional information on the properties for which there is a noncontrolling interest. All intercompany balances and transactions have been eliminated in consolidation.

We have prepared the accompanying unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information presented not misleading. In addition, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for the periods presented have been included. These unaudited financial statements should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2013.

Within these notes to the financial statements, we refer to the three months ended September 30, 2014 and September 30, 2013 as the “2014 Quarter” and the “2013 Quarter,” respectively, and the nine months ended September 30, 2014 and September 30, 2013 as the “2014 Period” and the “2013 Period,” respectively.

Use of Estimates in the Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Unsecured Lines of Credit Payable - Schedule of Credit Unused and Available (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Line of Credit Facility [Line Items]
Borrowings outstanding	$ (5,000)	$ 0
Line of Credit | Credit Facility No. 1
Line of Credit Facility [Line Items]
Committed capacity	100,000
Borrowings outstanding	(5,000)	0
Unused and available	95,000
Line of Credit | Credit Facility No. 2
Line of Credit Facility [Line Items]
Committed capacity	400,000
Borrowings outstanding	0
Unused and available	$ 400,000

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 segment	Sep. 30, 2013	Dec. 31, 2013
Segment Reporting Information [Line Items]
Number of reportable segments			3
Real estate rental revenue	$ 73,413	$ 65,828	$ 214,278	$ 196,303
Real estate expenses	25,914	23,243	77,784	69,467
Operating Income Loss Net	47,499	42,585	136,494	126,836
Depreciation and amortization	(24,354)	(21,168)	(71,508)	(63,328)
General and administrative	(4,523)	(3,850)	(13,780)	(11,717)
Acquisition costs	(69)	(148)	(5,047)	(448)
Interest expense	(15,087)	(15,930)	(44,602)	(47,944)
Other income	192	220	634	705
Gain on sale of real estate	0	0	570	0
Income from operations of properties sold or held for sale	0	4,131	546	11,139
Gain on sale of real estate	0	0	105,985	3,195	22,144
Net income	3,658	5,840	109,292	18,438
Less: Net income attributable to noncontrolling interests in subsidiaries	10	0	17	0
Net income attributable to the controlling interests	3,668	5,840	109,309	18,438
Capital expenditures	13,001	14,295	41,989	39,473
Total assets	2,059,379	2,088,355	2,059,379	2,088,355	1,975,493
Office [Member]
Segment Reporting Information [Line Items]
Real estate rental revenue	42,628	38,221	123,568	113,849
Real estate expenses	16,066	14,517	47,579	42,697
Operating Income Loss Net	26,562	23,704	75,989	71,152
Capital expenditures	7,804	9,535	30,974	26,773
Total assets	1,277,131	1,116,087	1,277,131	1,116,087
Retail [Member]
Segment Reporting Information [Line Items]
Real estate rental revenue	14,825	13,990	44,209	42,105
Real estate expenses	3,204	3,207	10,672	10,355
Operating Income Loss Net	11,621	10,783	33,537	31,750
Capital expenditures	3,037	198	4,157	2,732
Total assets	341,728	348,490	341,728	348,490
Multifamily [Member]
Segment Reporting Information [Line Items]
Real estate rental revenue	15,960	13,617	46,501	40,349
Real estate expenses	6,644	5,519	19,533	16,415
Operating Income Loss Net	9,316	8,098	26,968	23,934
Capital expenditures	2,157	4,041	6,814	6,808
Total assets	404,596	258,027	404,596	258,027
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Real estate rental revenue	0	0	0	0
Real estate expenses	0	0	0	0
Operating Income Loss Net	0	0	0	0
Capital expenditures	3	16	44	125
Total assets	35,924	45,823	35,924	45,823
Medical Office [Member]
Segment Reporting Information [Line Items]
Real estate rental revenue		0		0
Real estate expenses		0		0
Operating Income Loss Net		0		0
Capital expenditures		505		3,035
Total assets		$ 319,928		$ 319,928

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Assets
Land	$ 519,859	$ 426,575
Income producing property	1,867,752	1,675,652
Real estate investment property, at cost	2,387,611	2,102,227
Accumulated depreciation and amortization	(620,279)	(565,342)
Net income producing property	1,767,332	1,536,885
Properties under development or held for future development	99,500	61,315
Total real estate held for investment, net	1,866,832	1,598,200
Investment in real estate sold or held for sale, net	0	79,901
Cash and cash equivalents	8,571	130,343
Restricted cash	9,496	9,189
Rents and other receivables, net of allowance for doubtful accounts of $5,519 and $6,783, respectively	58,135	48,756
Prepaid expenses and other assets	116,345	105,004
Other assets related to properties sold or held for sale	0	4,100
Total assets	2,059,379	1,975,493
Liabilities
Notes payable	747,082	846,703
Mortgage notes payable	413,330	294,671
Lines of credit	5,000	0
Accounts payable and other liabilities	64,153	51,742
Advance rents	12,211	13,529
Tenant security deposits	8,625	7,869
Liabilities related to properties sold or held for sale	0	1,533
Total liabilities	1,250,401	1,216,047
Shareholders’ equity
Preferred shares; $0.01 par value; 10,000 shares authorized; no shares issued or outstanding	0	0
Shares of beneficial interest; $0.01 par value; 100,000 shares authorized: 66,663 and 66,531 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively	667	665
Additional paid in capital	1,153,344	1,151,174
Distributions in excess of net income	(347,724)	(396,880)
Total shareholders’ equity	806,287	754,959
Noncontrolling interests in subsidiaries	2,691	4,487
Total equity	808,978	759,446
Total liabilities and equity	$ 2,059,379	$ 1,975,493

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Net Cash Provided by (Used in) Operating Activities [Abstract]
Net income	$ 109,292	$ 18,438
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including amounts in discontinued operations	71,508	75,489
Provision for losses on accounts receivable	1,335	3,012
Gain on sale of real estate	(106,555)	(3,195)
Amortization of share grants, net	3,835	3,615
Amortization of debt premiums, discounts and related financing costs	2,730	2,980
Changes in operating other assets	16,255	8,856
Changes in operating other liabilities	(3,013)	2,002
Net cash provided by operating activities	62,877	93,485
Cash flows from investing activities
Real estate acquisitions, net	(154,126)	0
Net cash received for sale of real estate	190,864	15,161
Capital improvements to real estate	(41,945)	(39,348)
Development in progress	(28,363)	(9,385)
Real estate deposits, net	(2,500)	(6,800)
Increase (Decrease) in Restricted Cash	(550)	0
Non-real estate capital improvements	(44)	(125)
Net cash used in investing activities	(36,664)	(40,497)
Cash flows from financing activities
Line of credit borrowings, net	5,000	85,000
Dividends paid	(60,153)	(60,132)
Contributions from noncontrolling interests	5	390
Distributions to noncontrolling interests	(3,454)	0
Payment of financing costs	(660)	0
Principal payments – mortgage notes payable	(2,860)	(32,461)
Borrowings under construction loan	14,137	3,033
Notes payable repayments	(100,000)	(60,000)
Net cash used in financing activities	(147,985)	(64,170)
Net decrease in cash and cash equivalents	(121,772)	(11,182)
Cash and cash equivalents at beginning of period	130,343	19,105
Cash and cash equivalents at end of period	8,571	7,923
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	36,770	42,075
Cash paid for income taxes, net of refunds	156	0
Decrease in accrued capital improvements and development costs	10,860	2,978
Noncash or Part Noncash Acquisition, Debt Assumed	$ 100,861	$ 0

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Notes Payable (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended		0 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Mar. 15, 2013 Unsecured Debt [Member] 5.125% unsecured notes [Member]	Jan. 15, 2014 Unsecured Debt [Member] 5.125% unsecured notes [Member]
Debt Instrument [Line Items]
Repayments of Unsecured Debt	$ 100,000	$ 60,000	$ 100,000
Interest rate, stated percentage				5.25%

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Earnings per Common Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings per Share

The computations of basic and diluted earnings per share for the three and nine months ended September 30, 2014 and 2013 were as follows (in thousands, except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Numerator:
Income from continuing operations	$	3,658		$	1,709		$	2,761		$	4,104
Net loss attributable to noncontrolling interests	10			—			17			—
Allocation of earnings to unvested restricted share awards	(44		)	(32		)	11			(83		)
Adjusted income from continuing operations attributable to the controlling interests	3,624			1,677			2,789			4,021
Income from discontinued operations, including gain on sale of real estate, net of taxes	—			4,131			106,531			14,334
Allocation of earnings to unvested restricted share awards	—			(77		)	(335		)	(288		)
Adjusted income from discontinuing operations attributable to the controlling interests	—			4,054			106,196			14,046
Adjusted net income attributable to the controlling interests	$	3,624		$	5,731		$	108,985		$	18,067
Denominator:
Weighted average shares outstanding – basic	66,738			66,410			66,725			66,403
Effect of dilutive securities:
Operating partnership units	—			117			—			117
Employee stock options and restricted share awards	52			34			35			25
Weighted average shares outstanding – diluted	66,790			66,561			66,760			66,545
Earnings per common share, basic:
Continuing operations	$	0.05		$	0.03		$	0.04		$	0.06
Discontinued operations	—			0.06			1.59			0.21
	$	0.05		$	0.09		$	1.63		$	0.27
Earnings per common share, diluted:
Continuing operations	$	0.05		$	0.03		$	0.04		$	0.06
Discontinued operations	—			0.06			1.59			0.21
	$	0.05		$	0.09		$	1.63		$	0.27

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Stock Based Compensation (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 1.3	$ 1.2	$ 3.8	$ 3.6
Restricted Share Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of share grants vested			1.0	0.7
Total unvested restricted share awards (in shares)	207,082		207,082
Weighted average grant date fair value (in dollars per share)	$ 25.37		$ 25.37
Total compensation costs, non-vested restricted share awards	$ 1.7		$ 1.7
Total compensation cost not yet recognized, period for recognition (in months)			17 months
Washington Real Estate Investment Trust 2007 Omnibus Long-Term Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based plan, aggregate number of shares authorized (in shares)	2,000,000		2,000,000
Stock based plan, period in effect (in years)			10 years

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Nature of Business (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014		Dec. 31, 2013
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Percentage of distribution of ordinary taxable income	90.00%
Disposal Group, Including Discontinued Operation, Sale Price	$ 195,161		$ 322,939
Medical Office And Office Building [Member] | Medical Office Portfolio Transactions III & IV [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Sale Price	$ 193,600	[1]

[1] Woodburn Medical Park I and II and Prosperity Medical Center I, II and III.

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Nature of Business

9 Months Ended

Sep. 30, 2014

Nature Of Business [Abstract]

Nature of Business

NOTE 1: NATURE OF BUSINESS

Washington Real Estate Investment Trust (“Washington REIT”), a Maryland real estate investment trust, is a self-administered, self-managed equity real estate investment trust, successor to a trust organized in 1960. Our business consists of the ownership and operation of income-producing real estate properties in the greater Washington metro region. We own a diversified portfolio of office buildings, multifamily buildings and retail centers.

Federal Income Taxes

We believe that we qualify as a real estate investment trust (“REIT”) under Sections 856-860 of the Internal Revenue Code and intend to continue to qualify as such. To maintain our status as a REIT, we are required to distribute 90% of our ordinary taxable income to our shareholders. When selling properties, we have the option of (a) reinvesting the sales proceeds of properties sold, allowing for a deferral of income taxes on the sale, (b) paying out capital gains to the shareholders with no tax to Washington REIT or (c) treating the capital gains as having been distributed to the shareholders, paying the tax on the gain deemed distributed and allocating the tax paid as a credit to the shareholders. During the first quarter of 2014, we closed on Transactions III (for the sale of Woodburn Medical Park I and II) and IV (for the sale of Prosperity Medical Center I, II and III) of the Medical Office Portfolio sale for an aggregate contract sales price of $193.6 million. We have reinvested a portion of the Medical Office Portfolio sales proceeds in replacement properties through deferred tax exchanges.

Generally, and subject to our ongoing qualification as a REIT, no provisions for income taxes are necessary except for taxes on undistributed REIT taxable income and taxes on the income generated by our taxable REIT subsidiaries (“TRSs”). Our TRSs are subject to corporate federal and state income tax on their taxable income at regular statutory rates or as calculated under the alternative minimum tax, as appropriate. There were no material income tax provisions or material net deferred income tax items for our TRSs for the three and nine months ended September 30, 2014 and 2013.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Rents and other receivables, allowance for doubtful accounts	$ 5,519	$ 6,783
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized (in shares)	10,000	10,000
Preferred Stock, Shares Issued (in shares)	0	0
Preferred Stock, Shares Outstanding (in shares)	0	0
Shares of beneficial interest, par value (in dollars per share)	$ 0.01	$ 0.01
Shares of beneficial interest, shares authorized (in shares)	100,000	100,000
Shares of beneficial interest, shares issued (in shares)	66,663	66,531
Shares of beneficial interest, shares outstanding (in shares)	66,663	66,531

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Subsequent Event

9 Months Ended

Sep. 30, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 11: SUBSEQUENT EVENTS

On October 1, 2014, we closed on the purchase of Spring Valley Retail Center, a 75,000 square foot retail property in Washington, DC, for $40.5 million. We funded this acquisition with borrowings on our unsecured lines of credit. The initial accounting for the acquisition is incomplete due to the timing of the acquisition relative to the filing date of this report and, therefore, purchase price accounting and pro forma disclosures are not included.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Oct. 28, 2014
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Entity Registrant Name	WASHINGTON REAL ESTATE INVESTMENT TRUST
Entity Central Index Key	0000104894
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		66,661,627

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Summary of Significant Accounting Policies and Basis of Presentation (Policy)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

We have prepared our consolidated financial statements using the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2013.

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the requirements for reporting discontinued operations. Specifically, under this ASU only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. The primary impact of this ASU is that we are no longer required to report the disposal of every operating property in discontinued operations. Adoption of this ASU is required for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after after December 15, 2014, and interim periods within those years. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. We early adopted this ASU effective for the first quarter of 2014.

In June 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which creates a single source of revenue guidance. The new standard provides accounting guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers (unless the contracts are in the scope of other U.S. generally accepted accounting principles (“GAAP”) requirements, such as the leasing literature). The guidance also provides a model for the measurement and recognition of gains and losses on the sale of certain nonfinancial assets, such as property and equipment, including real estate. The new standard is effective for public entities for fiscal years beginning after December 15, 2016 and for interim periods therein. Early adoption is not permitted for public entities. We are currently evaluating the impact the new standard may have on Washington REIT.

Consolidation, Policy [Policy text block]

Principles of Consolidation and Basis of Presentation

The accompanying unaudited consolidated financial statements include the consolidated accounts of Washington REIT, our majority-owned subsidiaries and entities in which Washington REIT has a controlling interest, including where Washington REIT has been determined to be a primary beneficiary of a variable interest entity (“VIE”). See note 3 for additional information on the properties for which there is a noncontrolling interest. All intercompany balances and transactions have been eliminated in consolidation.

Basis of Accounting, Policy [Policy Text Block]

We have prepared the accompanying unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information presented not misleading. In addition, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for the periods presented have been included. These unaudited financial statements should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2013.

Within these notes to the financial statements, we refer to the three months ended September 30, 2014 and September 30, 2013 as the “2014 Quarter” and the “2013 Quarter,” respectively, and the nine months ended September 30, 2014 and September 30, 2013 as the “2014 Period” and the “2013 Period,” respectively.

Use of Estimates in the Financial Statements

Use of Estimates in the Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Condensed Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenue
Real estate rental revenue	$ 73,413	$ 65,828	$ 214,278	$ 196,303
Expenses
Real estate expenses	25,914	23,243	77,784	69,467
Depreciation and amortization	24,354	21,168	71,508	63,328
Acquisition costs	69	148	5,047	448
General and administrative	4,523	3,850	13,780	11,717
Operating Expenses	54,860	48,409	168,119	144,960
Gain on sale of real estate	0	0	570	0
Real estate operating income	18,553	17,419	46,729	51,343
Other income (expense)
Interest expense	(15,087)	(15,930)	(44,602)	(47,944)
Other income	192	220	634	705
Total other income (expense)	(14,895)	(15,710)	(43,968)	(47,239)
Income from continuing operations	3,658	1,709	2,761	4,104
Discontinued operations:
Income from operations of properties sold or held for sale	0	4,131	546	11,139
Gain on sale of real estate	0	0	105,985	3,195
Net income	3,658	5,840	109,292	18,438
Net Income (Loss) Attributable to Noncontrolling Interest	(10)	0	(17)	0
Net income attributable to the controlling interests	$ 3,668	$ 5,840	$ 109,309	$ 18,438
Basic net income per share:
Continuing operations (in dollars per share)	$ 0.05	$ 0.03	$ 0.04	$ 0.06
Discontinued operations (in dollars per share)	$ 0.00	$ 0.06	$ 1.59	$ 0.21
Net income per share (in dollars per share)	$ 0.05	$ 0.09	$ 1.63	$ 0.27
Diluted net income per share:
Continuing operations (in dollars per share)	$ 0.05	$ 0.03	$ 0.04	$ 0.06
Discontinued operations (in dollars per share)	$ 0.00	$ 0.06	$ 1.59	$ 0.21
Net income per share (in dollars per share)	$ 0.05	$ 0.09	$ 1.63	$ 0.27
Weighted average shares outstanding - basic (in shares)	66,738	66,410	66,725	66,403
Weighted average shares outstanding - diluted (in shares)	66,790	66,561	66,760	66,545
Dividends declared per share (in dollars per share)	$ 0.30	$ 0.30	$ 0.9	$ 0.90

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Notes Payable

9 Months Ended

Sep. 30, 2014

Notes Payable [Abstract]

Notes Payable

NOTE 6: NOTES PAYABLE

We repaid without penalty $100.0 million of our 5.25% unsecured notes on their due date of January 15, 2014, using proceeds from the sale of the Medical Office Portfolio.

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Unsecured Lines of Credit Payable

9 Months Ended

Sep. 30, 2014

Unsecured Debt [Abstract]

Unsecured Lines of Credit Payable

NOTE 5: UNSECURED LINES OF CREDIT PAYABLE

As of September 30,2014, we maintained a $100.0 million unsecured line of credit maturing in June 2015 ("Credit Facility No. 1") and a $400.0 million unsecured line of credit maturing in July 2016 ("Credit Facility No. 2"). Credit Facilities No. 1 and No. 2 have accordion features that allow us to increase the facilities to $200.0 million and $600.0 million, respectively, subject to additional lender commitments.

The amounts of these lines of credit unused and available at September 30, 2014 are as follows (in thousands):

	Credit Facility No. 1			Credit Facility No. 2
Committed capacity	$	100,000		$	400,000
Borrowings outstanding	(5,000		)	—
Unused and available	$	95,000		$	400,000

We executed borrowings on the unsecured lines of credit during the 2014 Period as follows (in thousands):

	Credit Facility No. 1
Balance at December 31, 2013	$	—
Borrowings	5,000
Balance at September 30, 2014	$	5,000

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting Information, Revenue for Reportable Segment [Abstract]

Reconciliation of Net Operating Income of Reportable Segments

The following tables present revenues, net operating income, capital expenditures and total assets for the 2014 and 2013 Quarters and Periods from these segments, and reconciles net operating income of reportable segments to net income attributable to the controlling interests as reported (in thousands):

	Three Months Ended September 30, 2014
	Office		Retail		Multifamily		Corporate and Other		Consolidated
Real estate rental revenue	$	42,628	$	14,825	$	15,960	$	—	$	73,413
Real estate expenses	16,066		3,204		6,644		—		25,914
Net operating income	$	26,562	$	11,621	$	9,316	$	—	$	47,499
Depreciation and amortization									(24,354		)
General and administrative									(4,523		)
Acquisition costs									(69		)
Interest expense									(15,087		)
Other income									192
Net income									3,658
Less: Net loss attributable to noncontrolling interests in subsidiaries									10
Net income attributable to the controlling interests									$	3,668
Capital expenditures	$	7,804	$	3,037	$	2,157	$	3	$	13,001
Total assets	$	1,277,131	$	341,728	$	404,596	$	35,924	$	2,059,379

	Three Months Ended September 30, 2013
	Office		Medical Office		Retail		Multifamily		Corporate and Other		Consolidated
Real estate rental revenue	$	38,221	$	—	$	13,990	$	13,617	$	—	$	65,828
Real estate expenses	14,517		—		3,207		5,519		—		23,243
Net operating income	$	23,704	$	—	$	10,783	$	8,098	$	—	$	42,585
Depreciation and amortization											(21,168		)
Acquisition costs											(148		)
General and administrative											(3,850		)
Interest expense											(15,930		)
Other income											220
Discontinued operations:
Income from operations of properties sold or held for sale											4,131
Net income											5,840
Less: Net income attributable to noncontrolling interests in subsidiaries											—
Net income attributable to the controlling interests											$	5,840
Capital expenditures	$	9,535	$	505	$	198	$	4,041	$	16	$	14,295
Total assets	$	1,116,087	$	319,928	$	348,490	$	258,027	$	45,823	$	2,088,355

	Nine Months Ended September 30, 2014
	Office		Retail		Multifamily		Corporate and Other		Consolidated
Real estate rental revenue	$	123,568	$	44,209	$	46,501	—		$	214,278
Real estate expenses	47,579		10,672		19,533		—		77,784
Net operating income	$	75,989	$	33,537	$	26,968	—		$	136,494
Depreciation and amortization									(71,508		)
General and administrative									(13,780		)
Acquisition costs									(5,047		)
Interest expense									(44,602		)
Other income									634
Gain on sale of real estate (classified as continuing operations)									570
Discontinued operations:
Income from operations of properties sold or held for sale									546
Gain on sale of real estate									105,985
Net income									109,292
Less: Net loss attributable to noncontrolling interests in subsidiaries									17
Net income attributable to the controlling interests									109,309
Capital expenditures	$	30,974	$	4,157	$	6,814	$	44	$	41,989

	Nine Months Ended September 30, 2013
	Office		Medical Office		Retail		Multifamily		Corporate and Other		Consolidated
Real estate rental revenue	$	113,849	$	—	$	42,105	$	40,349	$	—	$	196,303
Real estate expenses	42,697		—		10,355		16,415		—		69,467
Net operating income	$	71,152	$	—	$	31,750	$	23,934	$	—	$	126,836
Depreciation and amortization											(63,328		)
Acquisition costs											(448		)
General and administrative											(11,717		)
Interest expense											(47,944		)
Other income											705
Discontinued operations:
Income from operations of properties sold or held for sale											11,139
Gain on sale of real estate											3,195
Net income											18,438
Less: Net income attributable to noncontrolling interests in subsidiaries											—
Net income attributable to the controlling interests											$	18,438
Capital expenditures	$	26,773	$	3,035	$	2,732	$	6,808	$	125	$	39,473

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Real Estate (Tables)

9 Months Ended

Sep. 30, 2014

Real Estate [Abstract]

Schedule Of Real Estate Property Acquired [Table Text Block]

Washington REIT acquired the following properties during the 2014 Period:

			Rentable	Contract Purchase Price
Acquisition Date	Property Name	Type	Square Feet	(in thousands)
February 21, 2014	Yale West (216 units)	Multifamily	N/A	$	73,000
March 26, 2014	The Army Navy Club Building	Office	108,000	79,000
May 1, 2014	1775 Eye Street, NW	Office	185,000	104,500
			293,000	$	256,500

Revenue and Earnings From Acquisition [Table Text Block]

The revenue and earnings of our 2014 acquisitions are as follows (amounts in thousands):

	Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014
Real estate rental revenue	$	5,089		$	10,444
Net loss	(640		)	(2,752		)

Total Purchase Price Of Acquisitions [Table Text Block]

We have recorded the total purchase price of the above acquisitions as follows (in thousands):

Land	$	93,567
Buildings	141,456
Tenant origination costs	8,354
Leasing commissions/absorption costs	12,847
Net lease intangible assets	7,331
Net lease intangible liabilities	(2,122		)
Fair value of assumed mortgages	(107,125		)
Furniture fixtures and equipment	932
Total	$	155,240

Business Acquisition, Pro Forma Information [Table Text Block]

The following unaudited pro-forma combined condensed statements of operations are for the 2014 and 2013 Quarters and Periods as if the above described acquisitions had occurred at the beginning of the period of acquisition and the same period in the year prior to acquisition. The unaudited pro-forma information does not purport to be indicative of the results that actually would have occurred if the acquisitions had been in effect for the 2014 and 2013 Quarters and Periods. The unaudited data presented is in thousands, except per share data.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Real estate rental revenue	$	73,413	$	71,004	$	219,192	$	211,662
Income from continuing operations	3,668		477		1,960		449
Net income	3,668		4,608		108,492		14,783
Diluted earnings per share	0.05		0.07		1.62		0.22

Land and Capitalized Development Costs

As of September 30, 2014 and December 31, 2013, the land and capitalized development costs are as follows (in thousands):

	September 30, 2014		December 31, 2013
The Maxwell	$	47,084	$	27,343
1225 First Street	20,807		20,788

Schedule of Accounts Payable and Accrued Liabilities of Joint Ventures

As of September 30, 2014 and December 31, 2013, the accounts payable and accrued liabilities related to the joint ventures are as follows (in thousands):

	September 30, 2014		December 31, 2013
The Maxwell	$	6,253	$	1,785
1225 First Street	76		39

Schedule of Income Statement Results for Medical Office Segment

The results of our medical office segment are summarized as follows (amounts in thousands, except per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Real estate rental revenue	$	—	$	10,889	$	892	$	32,928
Net income	—		3,820		546		10,080
Basic net income per share	—		0.06		0.01		0.15
Diluted net income per share	—		0.06		0.01		0.15

Schedule of Dispositions

We sold the following properties in 2014 and 2013:

Property Name	Segment	Rentable Square Feet	Contract Purchase  Price (in thousands)		Gain on Sale (in thousands)
Medical Office Portfolio Transactions III & IV (1)	Medical Office	427,000	$	193,561	$	105,985
5740 Columbia Road (2)	Retail	3,000	1,600		570
	Total 2014	430,000	$	195,161	$	106,555
Atrium Building	Office	79,000	$	15,750	$	3,195
Medical Office Portfolio Transactions I & II (3)	Medical Office / Office	1,093,000	307,189		18,949
	Total 2013	1,172,000	$	322,939	$	22,144

Schedule of Investment in Real Estate for Properties Sold or Held For Sale and Related Liabilities

s of September 30, 2014 and December 31, 2013, investment in real estate for properties sold or held for sale, all of which were in the medical office segment, was as follows (in thousands):

	September 30, 2014		December 31, 2013
Investment in real estate sold or held for sale	$	—	$	125,967
Less accumulated depreciation	—		(46,066		)
Investment in real estate sold or held for sale, net	$	—	$	79,901

Operating Income (Loss) for Discontinued Operations

Income from operations of properties sold or held for sale for the three and nine months ended September 30, 2014 and 2013 was as follows (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014			2013
Real estate rental revenue	$	—	$	12,073		$	892		$	37,141
Real estate expenses	—		(4,398		)	(346		)	(12,856		)
Depreciation and amortization	—		(3,215		)	—			(12,161		)
Interest expense	—		(329		)	—			(985		)
Income from operations of properties sold or held for sale	$	—	$	4,131		$	546		$	11,139

Operating Income (Loss) By Property Classified As Discontinued Operations

Income from operations of properties sold or held for sale by property for the three and nine months ended September 30, 2014 and 2013 was as follows (in thousands):

		Three Months Ended September 30,				Nine Months Ended September 30,
Property	Segment	2014		2013		2014		2013
Atrium Building	Office	$	—	$	—	$	—	$	185
Medical Office Portfolio	Medical Office / Office	—		4,131		546		10,954
		$	—	$	4,131	$	546	$	11,139

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Earnings per Common Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings per Common Share

NOTE 9: EARNINGS PER COMMON SHARE

We determine “Basic earnings per share” using the two-class method as our unvested restricted share awards and units have non-forfeitable rights to dividends and are therefore considered participating securities. We compute basic earnings per share by dividing net income attributable to the controlling interest less the allocation of earnings to unvested restricted share awards and units by the weighted-average number of common shares outstanding for the period.

We also determine “Diluted earnings per share” under the two-class method with respect to the unvested restricted share awards. We further evaluate any other potentially dilutive securities at the end of the period and adjust the basic earnings per share calculation for the impact of those securities that are dilutive. Our dilutive earnings per share calculation includes the dilutive impact of employee stock options based on the treasury stock method and our incentive share awards with performance or market conditions under the contingently issuable method. The diluted earnings per share calculation also considers operating partnership units (if any) under the if-converted method.

The computations of basic and diluted earnings per share for the three and nine months ended September 30, 2014 and 2013 were as follows (in thousands, except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Numerator:
Income from continuing operations	$	3,658		$	1,709		$	2,761		$	4,104
Net loss attributable to noncontrolling interests	10			—			17			—
Allocation of earnings to unvested restricted share awards	(44		)	(32		)	11			(83		)
Adjusted income from continuing operations attributable to the controlling interests	3,624			1,677			2,789			4,021
Income from discontinued operations, including gain on sale of real estate, net of taxes	—			4,131			106,531			14,334
Allocation of earnings to unvested restricted share awards	—			(77		)	(335		)	(288		)
Adjusted income from discontinuing operations attributable to the controlling interests	—			4,054			106,196			14,046
Adjusted net income attributable to the controlling interests	$	3,624		$	5,731		$	108,985		$	18,067
Denominator:
Weighted average shares outstanding – basic	66,738			66,410			66,725			66,403
Effect of dilutive securities:
Operating partnership units	—			117			—			117
Employee stock options and restricted share awards	52			34			35			25
Weighted average shares outstanding – diluted	66,790			66,561			66,760			66,545
Earnings per common share, basic:
Continuing operations	$	0.05		$	0.03		$	0.04		$	0.06
Discontinued operations	—			0.06			1.59			0.21
	$	0.05		$	0.09		$	1.63		$	0.27
Earnings per common share, diluted:
Continuing operations	$	0.05		$	0.03		$	0.04		$	0.06
Discontinued operations	—			0.06			1.59			0.21
	$	0.05		$	0.09		$	1.63		$	0.27

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Stock Based Compensation

9 Months Ended

Sep. 30, 2014

Share-based Compensation [Abstract]

Stock Based Compensation

NOTE 7: STOCK BASED COMPENSATION

Washington REIT maintains short-term ("STIP") and long-term ("LTIP") incentive plans that allow for stock-based awards to officers and non-officer employees. Stock based awards are provided to officers and non-officer employees, as well as trustees, under the Washington Real Estate Investment Trust 2007 Omnibus Long-Term Incentive Plan which allows for awards in the form of restricted shares, restricted share units, options and other awards up to an aggregate of 2,000,000 shares over the ten year period in which the plan will be in effect. Restricted share units are converted into shares of our stock upon full vesting through the issuance of new shares.

During the 2014 Period, the Board of Trustees adopted a new STIP and new LTIP for executive officers. Regarding the new STIP, the changes from the prior STIP primarily removed the 15% service-only component of the award, maintaining an award payable 50% in cash and 50% in stock. The new LTIP is based entirely on total shareholder return during a defined three-year period. The LTIP was also converted from a single three-year plan structure to a “rolling” structure in which a new three-year plan is commenced each year. The vesting at the end of the performance period was modified to be 75% at the end of the performance period and 25% one year thereafter. In addition, during the transition period to the new LTIP, the Board of Trustees awarded similar transition awards with defined performance periods of one and two years and modified vesting to account for the transition.

Total Compensation Expense

Total compensation expense recognized in the consolidated financial statements for all outstanding share based awards was $1.3 million and $1.2 million for the 2014 and 2013 Quarters, respectively, and $3.8 million and $3.6 million for the 2014 and 2013 Periods, respectively.

Restricted Share Awards

The total fair values of restricted share awards vested was $1.0 million and $0.7 million for the 2014 and 2013 Periods, respectively.

The total unvested restricted share awards at September 30, 2014 was 207,082 shares, which had a weighted average grant date fair value of $25.37 per share. As of September 30, 2014, the total compensation cost related to unvested restricted share awards was $1.7 million, which we expect to recognize over a weighted average period of 17 months.

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Fair Value Disclosures

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures

NOTE 8: FAIR VALUE DISCLOSURES

Assets and Liabilities Measured at Fair Value

For assets and liabilities measured at fair value on a recurring basis, quantitative disclosures about the fair value measurements are required to be disclosed separately for each major category of assets and liabilities, as follows:

Level 1: Quoted prices in active markets for identical assets

Level 2: Significant other observable inputs

Level 3: Significant unobservable inputs

The only assets or liabilities we had at September 30, 2014 and December 31, 2013 that are recorded at fair value on a recurring basis are the assets held in the Supplemental Executive Retirement Program (“SERP”). We base the valuations related to this asset on the observable market values of the investments that comprise the SERP (Level 2 inputs).

The fair values of these assets at September 30, 2014 and December 31, 2013 were as follows (in thousands):

	September 30, 2014								December 31, 2013
	Fair Value		Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3
Assets:
SERP	$	2,616	$	—	$	2,616	$	—	$	3,290	$	—	$	3,290	$	—

Financial Assets and Liabilities Not Measured at Fair Value

The following disclosures of estimated fair value were determined by management using available market information and established valuation methodologies, including discounted cash flow. Many of these estimates involve significant judgment. The estimated fair value disclosed may not necessarily be indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have an effect on the estimated fair value amounts. In addition, fair value estimates are made at a point in time and thus, estimates of fair value subsequent to September 30, 2014 may differ significantly from the amounts presented.

Following is a summary of significant methodologies used in estimating fair values and a schedule of fair values at September 30, 2014.

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents and restricted cash include cash and commercial paper with original maturities of less than 90 days, which are valued at the carrying value, which approximates fair value due to the short maturity of these instruments (Level 1 inputs).

Notes Receivable

We acquired a note receivable ("2445 M Street note") in 2008 with the purchase of 2445 M Street. We estimate the fair value of the 2445 M Street note based on a discounted cash flow methodology using market discount rates (Level 3 inputs).

Debt

Mortgage notes payable consist of instruments in which certain of our real estate assets are used for collateral. We estimate the fair value of the mortgage notes payable by discounting the contractual cash flows at a rate equal to the relevant treasury rates (with respect to the timing of each cash flow) plus credit spreads estimated through independent comparisons to real estate assets or loans with similar characteristics. Lines of credit payable consist of bank facilities which we use for various purposes including working capital, acquisition funding or capital improvements. The lines of credit advances are priced at a specified rate plus a spread. We estimate the market value based on a comparison of the spreads of the advances to market given the adjustable base rate. We estimate the fair value of the notes payable by discounting the contractual cash flows at a rate equal to the relevant treasury rates (with respect to the timing of each cash flow) plus credit spreads derived using the relevant securities’ market prices. We classify these fair value measurements as Level 3 as we use significant unobservable inputs and management judgment due to the absence of quoted market prices.

As of September 30, 2014 and December 31, 2013, the carrying values and estimated fair values of our financial instruments were as follows (in thousands):

	September 30, 2014				December 31, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash and cash equivalents	$	8,571	$	8,571	$	130,343	$	130,343
Restricted cash	9,496		9,496		9,189		9,189
2445 M Street note	5,556		6,755		6,070		6,803
Mortgage notes payable	413,330		429,957		294,671		313,476
Lines of credit	5,000		5,000		—		—
Notes payable	747,082		782,450		846,703		856,171

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Segment Information

9 Months Ended

Sep. 30, 2014

Segment Reporting Information, Revenue for Reportable Segment [Abstract]

Segment Information

NOTE 10: SEGMENT INFORMATION

We have three reportable segments: office, retail and multifamily. Office buildings provide office space for various types of businesses and professions. Retail shopping centers are typically grocery store anchored neighborhood centers that include other small shop tenants or regional power centers with several junior box tenants. Multifamily properties provide rental housing for individuals and families throughout the Washington metropolitan area. During the 2014 Period, we completed the sale of our medical office segment (see note 3).

We evaluate performance based upon operating income from the combined properties in each segment. Our reportable operating segments are consolidations of similar properties. GAAP requires that segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing segments’ performance. Net operating income is a key measurement of our segment profit and loss. Net operating income is defined as segment real estate rental revenue less segment real estate expenses.

The following tables present revenues, net operating income, capital expenditures and total assets for the 2014 and 2013 Quarters and Periods from these segments, and reconciles net operating income of reportable segments to net income attributable to the controlling interests as reported (in thousands):

	Three Months Ended September 30, 2014
	Office		Retail		Multifamily		Corporate and Other		Consolidated
Real estate rental revenue	$	42,628	$	14,825	$	15,960	$	—	$	73,413
Real estate expenses	16,066		3,204		6,644		—		25,914
Net operating income	$	26,562	$	11,621	$	9,316	$	—	$	47,499
Depreciation and amortization									(24,354		)
General and administrative									(4,523		)
Acquisition costs									(69		)
Interest expense									(15,087		)
Other income									192
Net income									3,658
Less: Net loss attributable to noncontrolling interests in subsidiaries									10
Net income attributable to the controlling interests									$	3,668
Capital expenditures	$	7,804	$	3,037	$	2,157	$	3	$	13,001
Total assets	$	1,277,131	$	341,728	$	404,596	$	35,924	$	2,059,379

	Three Months Ended September 30, 2013
	Office		Medical Office		Retail		Multifamily		Corporate and Other		Consolidated
Real estate rental revenue	$	38,221	$	—	$	13,990	$	13,617	$	—	$	65,828
Real estate expenses	14,517		—		3,207		5,519		—		23,243
Net operating income	$	23,704	$	—	$	10,783	$	8,098	$	—	$	42,585
Depreciation and amortization											(21,168		)
Acquisition costs											(148		)
General and administrative											(3,850		)
Interest expense											(15,930		)
Other income											220
Discontinued operations:
Income from operations of properties sold or held for sale											4,131
Net income											5,840
Less: Net income attributable to noncontrolling interests in subsidiaries											—
Net income attributable to the controlling interests											$	5,840
Capital expenditures	$	9,535	$	505	$	198	$	4,041	$	16	$	14,295
Total assets	$	1,116,087	$	319,928	$	348,490	$	258,027	$	45,823	$	2,088,355

	Nine Months Ended September 30, 2014
	Office		Retail		Multifamily		Corporate and Other		Consolidated
Real estate rental revenue	$	123,568	$	44,209	$	46,501	—		$	214,278
Real estate expenses	47,579		10,672		19,533		—		77,784
Net operating income	$	75,989	$	33,537	$	26,968	—		$	136,494
Depreciation and amortization									(71,508		)
General and administrative									(13,780		)
Acquisition costs									(5,047		)
Interest expense									(44,602		)
Other income									634
Gain on sale of real estate (classified as continuing operations)									570
Discontinued operations:
Income from operations of properties sold or held for sale									546
Gain on sale of real estate									105,985
Net income									109,292
Less: Net loss attributable to noncontrolling interests in subsidiaries									17
Net income attributable to the controlling interests									109,309
Capital expenditures	$	30,974	$	4,157	$	6,814	$	44	$	41,989

	Nine Months Ended September 30, 2013
	Office		Medical Office		Retail		Multifamily		Corporate and Other		Consolidated
Real estate rental revenue	$	113,849	$	—	$	42,105	$	40,349	$	—	$	196,303
Real estate expenses	42,697		—		10,355		16,415		—		69,467
Net operating income	$	71,152	$	—	$	31,750	$	23,934	$	—	$	126,836
Depreciation and amortization											(63,328		)
Acquisition costs											(448		)
General and administrative											(11,717		)
Interest expense											(47,944		)
Other income											705
Discontinued operations:
Income from operations of properties sold or held for sale											11,139
Gain on sale of real estate											3,195
Net income											18,438
Less: Net income attributable to noncontrolling interests in subsidiaries											—
Net income attributable to the controlling interests											$	18,438
Capital expenditures	$	26,773	$	3,035	$	2,732	$	6,808	$	125	$	39,473

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Unsecured Lines of Credit Payable - Narrative (Details) (Line of Credit, USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014
Credit Facility No. 1
Line of Credit Facility [Line Items]
Line of Credit Facility, Expiration Date	Jun. 30, 2015
Line of Credit Facility, Maximum Borrowing Capacity	$ 100,000	$ 100,000
Borrowings		5,000
Credit Facility No. 2
Line of Credit Facility [Line Items]
Line of Credit Facility, Expiration Date	Jul. 31, 2016
Line of Credit Facility, Maximum Borrowing Capacity	400,000	400,000
Maximum | Credit Facility No. 1
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	200,000	200,000
Maximum | Credit Facility No. 2
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 600,000	$ 600,000

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Fair Value Disclosures (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Measured at Fair Value

The fair values of these assets at September 30, 2014 and December 31, 2013 were as follows (in thousands):

	September 30, 2014								December 31, 2013
	Fair Value		Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3
Assets:
SERP	$	2,616	$	—	$	2,616	$	—	$	3,290	$	—	$	3,290	$	—

Financial Assets and Liabilities Not Measured at Fair Value

As of September 30, 2014 and December 31, 2013, the carrying values and estimated fair values of our financial instruments were as follows (in thousands):

	September 30, 2014				December 31, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash and cash equivalents	$	8,571	$	8,571	$	130,343	$	130,343
Restricted cash	9,496		9,496		9,189		9,189
2445 M Street note	5,556		6,755		6,070		6,803
Mortgage notes payable	413,330		429,957		294,671		313,476
Lines of credit	5,000		5,000		—		—
Notes payable	747,082		782,450		846,703		856,171

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Real Estate - Redevelopment (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Real Estate Properties [Line Items]
Development in Process	$ 99,500,000	$ 61,315,000
7900 Westpark Drive [Member]
Real Estate Properties [Line Items]
Estimated development costs	35,000,000
Development in Process	$ 18,400,000	$ 3,600,000

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Subsequent Event (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended			0 Months Ended
	Sep. 30, 2014 sqft	Sep. 30, 2013	Dec. 31, 2013 sqft	Oct. 02, 2014 Property Acquired [Member] Spring Vally Retail Center [Member] Subsequent Event [Member] sqft
Subsequent Event [Line Items]
Rentable Square Feet	430,000		1,172,000	75,000
Payments to Acquire Real Estate	$ 154,126	$ 0		$ 40,500

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Consolidated Statements of Shareholders' Equity (USD $) In Thousands, unless otherwise specified	Total	Shares of Beneficial Interest at Par Value [Member]	Additional Paid in Capital [Member]	Distributions in Excess of Net Income Attributable to the Controlling Interests [Member]	Total Shareholders' Equity [Member]	Noncontrolling Interests in Subsidiaries [Member]
Balance at Dec. 31, 2013	$ 759,446	$ 665	$ 1,151,174	$ (396,880)	$ 754,959	$ 4,487
Balance (in shares) at Dec. 31, 2013		66,531
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to the controlling interests	109,309			109,309	109,309
Net Income (Loss) Attributable to Noncontrolling Interest	(17)					(17)
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders	(1,784)					(1,784)
Contributions From Noncontrolling Interest	5					5
Dividends	(60,153)			(60,153)	(60,153)
Share grants, net of share grant amortization and forfeitures	2,172	2	2,170		2,172
Share grants, net of share grant amortization and forfeitures (in shares)		132
Balance at Sep. 30, 2014	$ 808,978	$ 667	$ 1,153,344	$ (347,724)	$ 806,287	$ 2,691
Balance (in shares) at Sep. 30, 2014		66,663

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Mortgage Notes Payable

9 Months Ended

Sep. 30, 2014

Mortgage Notes Payable [Abstract]

Mortgage Notes Payable

NOTE 4: MORTGAGE NOTES PAYABLE

In February 2014, we assumed a $48.2 million mortgage note as partial consideration for the acquisition of Yale West. This mortgage note bears interest at 5.55% per annum. The fair value interest rate on this mortgage note is 3.75% based on quotes obtained for similar loans. We recorded the mortgage note at its estimated fair value of $54.0 million. Principal and interest are payable monthly until January 1, 2052, at which time all unpaid principal and interest are payable in full. The loan may be prepaid, without penalty, on January 31, 2022 or thereafter on the last business day of the month until maturity, with thirty days prior written notice to the lender.

In March 2014, we assumed a $52.7 million mortgage note as partial consideration for acquisition of The Army Navy Club Building. This mortgage note bears interest at 3.45% per annum. The fair value interest rate on this mortgage note is 3.18% based on quotes obtained for similar loans. We recorded the mortgage at its estimated fair value of $53.2 million. Principal and interest are payable monthly until May 1, 2017, at which time all unpaid principal and interest are payable in full.

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Real Estate - Variable Interest Entities (Details) (USD $)	9 Months Ended		1 Months Ended	3 Months Ended	9 Months Ended		1 Months Ended	9 Months Ended		9 Months Ended			0 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Jun. 30, 2011 650 North Glebe Road [Member]	Sep. 30, 2013 650 North Glebe Road [Member]	Sep. 30, 2014 650 North Glebe Road [Member]	Dec. 31, 2013 650 North Glebe Road [Member]	Nov. 30, 2011 1225 First Street [Member]	Sep. 30, 2014 1225 First Street [Member]	Dec. 31, 2013 1225 First Street [Member]	Sep. 30, 2014 650 N Glebe [Member] [Domain] extension_option	Dec. 31, 2013 650 N Glebe [Member] [Domain]	Feb. 21, 2013 650 N Glebe [Member] [Domain]	Feb. 21, 2013 London Interbank Offered Rate (LIBOR) [Member] Secured Debt [Member] Maximum 650 N Glebe [Member] [Domain]	Feb. 21, 2013 London Interbank Offered Rate (LIBOR) [Member] Secured Debt [Member] Minimum [Member] 650 N Glebe [Member] [Domain]
Real Estate Properties [Line Items]
Long-term Construction Loan												$ 33,000,000
Estimated development costs			49,900,000				95,300,000
Percentage of capital contribution through debt	70.00%			70.00%				70.00%
Variable interest entity, qualitative or quantitative information, ownership percentage					90.00%			95.00%
Percentage of residential property to be leased to achieve project stabilization stage					90.00%
Noncontrolling interest, ownership percentage by noncontrolling owners					10.00%			5.00%
Land and capitalized development costs related to joint ventures					47,084,000	27,343,000		20,807,000	20,788,000
Accounts payable and accrued liabilities related to joint ventures					6,253,000	1,785,000		76,000	39,000
Mortgage notes payable	$ 413,330,000	$ 294,671,000								$ 21,400,000	$ 7,300,000
Debt Instrument, Basis Spread on Variable Rate													2.15%	2.00%
Number of Extension Options										2
Debt Agreement Optional Extension Period Exercisable by Option										1 year

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Fair Value Disclosures - Financial Assets and Liabilities Not Measured at Fair Value (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014 Reported Value Measurement [Member]	Dec. 31, 2013 Reported Value Measurement [Member]	Sep. 30, 2014 Reported Value Measurement [Member] 2445 M Street Note Receivable [Member]	Dec. 31, 2013 Reported Value Measurement [Member] 2445 M Street Note Receivable [Member]	Sep. 30, 2014 Fair Value	Dec. 31, 2013 Fair Value	Sep. 30, 2014 Fair Value 2445 M Street Note Receivable [Member]	Dec. 31, 2013 Fair Value 2445 M Street Note Receivable [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Commercial paper, maturity	90
Cash and cash equivalents, Fair Value		$ 8,571	$ 130,343			$ 8,571	$ 130,343
Restricted Cash, Fair Value		9,496	9,189			9,496	9,189
2445 M Street note receivable, Fair Value				5,556	6,070			6,755	6,803
Mortgage notes payable, Fair Value		413,330	294,671			429,957	313,476
Lines of Credit, Fair Value Disclosure		5,000	0			5,000	0
Notes payable, Fair Value		$ 747,082	$ 846,703			$ 782,450	$ 856,171

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Unsecured Lines of Credit Payable (Tables)

9 Months Ended

Sep. 30, 2014

Unsecured Debt [Abstract]

Lines of Credit Unused and Available

The amounts of these lines of credit unused and available at September 30, 2014 are as follows (in thousands):

	Credit Facility No. 1			Credit Facility No. 2
Committed capacity	$	100,000		$	400,000
Borrowings outstanding	(5,000		)	—
Unused and available	$	95,000		$	400,000

We executed borrowings on the unsecured lines of credit during the 2014 Period as follows (in thousands):

	Credit Facility No. 1
Balance at December 31, 2013	$	—
Borrowings	5,000
Balance at September 30, 2014	$	5,000