Real Estate Properties

9 Months Ended

Sep. 30, 2011

Real Estate Properties

Real Estate Properties

Note 3.   Real Estate Properties

We generally lease space in our properties on a gross lease or modified gross lease basis pursuant to fixed term operating leases expiring between 2011 and 2025.  Certain of our government tenants have the right to cancel their leases before the lease terms expire, although we expect that few will do so.  Our leases generally require us to pay all or some property operating expenses and to provide all or most property management services.  During the three months ended September 30, 2011, we executed seven leases for 85,444 rentable square feet and a weighted average lease term of 9.6 years and made commitments for approximately $2,872 of leasing related costs.  During the nine months ended September 30, 2011, we executed 22 leases for 130,882 rentable square feet and a weighted average lease term of 8.6 years and made commitments for approximately $3,688 of leasing related costs.  We have unspent tenancy related obligations of approximately $12,690 as of September 30, 2011.

In February 2011, we acquired an office property located in Quincy, MA with 92,549 rentable square feet.  This property is majority leased to the State of Massachusetts.  The purchase price was $14,000, excluding acquisition costs.  We allocated approximately $2,700 to land, $9,200 to building and improvements, $2,113 to acquired real estate leases and $13 to assumed real estate lease obligations based on the estimated fair values of the acquired assets and assumed liabilities.

Also in February 2011, we acquired two office properties located in Woodlawn, MD with 182,561 rentable square feet.  These properties are majority leased to the U.S. Government.  The purchase price was $28,000, excluding acquisition costs.  We allocated approximately $3,735 to land, $21,509 to building and improvements, $3,281 to acquired real estate leases and $525 to assumed real estate lease obligations based on the estimated fair values of the acquired assets and assumed liabilities.

In May 2011, we acquired an office property located in Plantation, FL with 135,819 rentable square feet.  This property is leased to the U.S. Government.  The purchase price was $40,750, excluding acquisition costs.  We allocated approximately $4,800 to land, $30,592 to building and improvements and $5,358 to acquired real estate leases based on the estimated fair values of the acquired assets.

Also in May 2011, we acquired an office property located in New York, NY with 187,060 rentable square feet.  This property is leased to the United Nations.  The purchase price was $114,050, excluding acquisition costs.  We allocated approximately $36,800 to land, $66,661 to building and improvements and $10,589 to acquired real estate leases based on the estimated fair values of the acquired assets.

In June 2011, we acquired an office property located in Milwaukee, WI with 29,297 rentable square feet.  This property is leased to the U.S. Government.  The purchase price was $6,775, excluding acquisition costs.  We allocated approximately $945 to land, $4,539 to building and improvements and $1,291 to acquired real estate leases based on the estimated fair values of the acquired assets.

Also in June 2011, we acquired two office properties located in Stafford, VA with 64,488 rentable square feet.  These properties are leased to the U.S. Government.  The purchase price was $11,550, excluding acquisition costs.  We allocated approximately $2,090 to land, $7,465 to building and improvements and $1,995 to acquired real estate leases based on the estimated fair values of the acquired assets.

Also in June 2011, we acquired an office property located in Montgomery, AL with 57,815 rentable square feet.  This property is leased to the U.S. Government.  The purchase price was $11,550, excluding acquisition costs.  We allocated approximately $920 to land, $9,084 to building and improvements and $1,546 to acquired real estate leases based on the estimated fair values of the acquired assets.

In August 2011, we acquired an office property located in Holtsville, NY with 264,482 rentable square feet.  This property is majority leased to the U.S. Government.  The purchase price was $39,250, excluding acquisition costs.  We allocated approximately $6,530 to land, $17,711 to building and improvements and $13,453 to acquired real estate leases based on the estimated fair values of the acquired assets.

In September 2011, we acquired an office property located in Sacramento, CA with 87,863 rentable square feet.  This property is leased to the State of California.  The purchase price was $13,600, excluding acquisition costs.  We allocated approximately $1,450 to land, $9,465 to building and improvements and $2,685 to acquired real estate leases based on the estimated fair values of the acquired assets.

Also in September 2011, we acquired an office property located in Atlanta, GA with 375,805 rentable square feet.  This property is majority leased to the State of Georgia.  The purchase price was $48,600, excluding acquisition costs.  We allocated approximately $10,250 to land, $27,933 to building and improvements, $10,421 to acquired real estate leases and $4 to assumed real estate lease obligations based on the estimated fair values of the acquired assets and assumed liabilities.

In October 2011, we acquired three office properties located in Indianapolis, IN with 433,927 rentable square feet.  These properties are majority leased to the U.S. Government.  The purchase price was $85,000, including the assumption of $49,395 of mortgage debt and excluding acquisition costs.

Also in October 2011, we entered into an agreement to acquire an office property located in Salem, OR with 233,358 rentable square feet.  This property is majority leased to the State of Oregon.  The contract purchase price is $32,000, excluding acquisition costs.  This pending acquisition is subject to our satisfactory completion of diligence and other customary closing conditions; accordingly, we can provide no assurance that we will acquire this property.