Real Estate Properties

12 Months Ended

Dec. 31, 2021

Real Estate PropertiesAs of December 31, 2021, our wholly owned properties were comprised of 178 properties containing approximately 23,271,000 rentable square feet, with an aggregate undepreciated carrying value of $3,938,876, including $27,790 classified as held for sale. We also had noncontrolling ownership interests of 51% and 50% in two unconsolidated joint ventures that own three properties totaling approximately 444,000 rentable square feet. We generally lease space at our properties on a gross lease, modified gross lease or net lease basis pursuant to fixed term contracts expiring between 2022 and 2053. Some of our leases generally require us to pay all or some property operating expenses and to provide all or most property management services. During the year ended December 31, 2021, we entered into 85 leases for approximately 2,484,000 rentable square feet for a weighted (by rentable square feet) average lease term of 9.5 years and we made commitments for approximately $142,318 of leasing related costs. As of December 31, 2021, we have estimated unspent leasing related obligations of $121,754.

2021 Acquisition Activities

During the year ended December 31, 2021, we acquired three properties containing approximately 926,000 rentable square feet for an aggregate purchase price of $576,478, including net purchase price adjustments of $1,761 and acquisition related costs of $1,264. These acquisitions were accounted for as asset acquisitions. We allocated the purchase prices of these acquisitions based on the relative estimated fair values of the acquired assets and assumed liabilities as follows:


Acquisition Date	Location	Number of Properties	Rentable Square Feet	Purchase Price		Land		Buildings and Improvements		Acquired Real Estate Leases		Assumed Real Estate Lease Obligations
June 2021	Chicago, IL (1)	1	531,000	$	368,331	$	42,935	$	258,348	$	76,136	$	(9,088)
June 2021	Atlanta, GA	1	346,000	180,602		13,040		135,459		32,103		—
August 2021	Boston, MA	1	49,000	27,545		16,103		10,217		1,225		—












		3	926,000	$	576,478	$	72,078	$	404,024	$	109,464	$	(9,088)

(1)Purchase price includes an adjustment of $13,031 to record an estimated real estate tax liability as of the acquisition date.

2020 Acquisition Activities

During the year ended December 31, 2020, we acquired two properties containing approximately 163,000 rentable square feet for an aggregate purchase price of $47,215, including capitalized acquisition related costs of $590. These acquisitions were accounted for as asset acquisitions. We allocated the purchase prices of these acquisitions based on the relative estimated fair values of the acquired assets as follows:


Acquisition Date	Location	Number of Properties	Rentable Square Feet	Purchase Price		Land		Buildings and Improvements		Acquired Real Estate Leases
February 2020	Boston, MA	1	13,000	$	11,864	$	2,618	$	9,246	$	—
December 2020	Fort Mill, SC	1	150,000	35,351		5,031		22,526		7,794

		2	163,000	$	47,215	$	7,649	$	31,772	$	7,794

2019 Acquisition Activities

In November 2019, we acquired a land parcel adjacent to a property we own in Boston, MA for $2,900, excluding acquisition related costs.

Disposition Activities

The sales completed during the years ended December 31, 2021, 2020 and 2019, as presented in the tables below, do not represent significant dispositions individually (unless otherwise noted) or in the aggregate, nor do they represent a strategic shift in our business. As a result, the results of operations of these properties are included in continuing operations through the date of sale in our consolidated statements of comprehensive income (loss).

2021 Disposition Activities

During the year ended December 31, 2021, we sold six properties, a warehouse facility adjacent to a property we own located in Kansas, MO and two vacant land parcels adjacent to properties we own located in Sterling, VA containing approximately 2,565,000 rentable square feet for an aggregate sales price of $226,915, excluding closing costs.


Date of Sale	Number of Properties	Location	Rentable Square Feet	Gross Sales Price (1)		Gain (Loss) on Sale of Real Estate		Loss on Impairment of Real Estate
January 2021	—	Kansas City, MO (2) (3)	10,000	$	845	$	(63)	$	—
January 2021	1	Richmond, VA (2)	311,000	130,000		54,181		—
April 2021	1	Huntsville, AL	1,371,000	39,000		—		5,383
July 2021	1	Fresno, CA	532,000	6,000		—		33,902
July 2021	1	Liverpool, NY	38,000	650		31		—
August 2021	1	Memphis, TN	205,000	15,270		287		—
September 2021	1	Stoneham, MA	98,000	6,650		(282)		5,911
October 2021	—	Sterling, VA (4)	—	28,500		24,200		—







	6		2,565,000	$	226,915	$	78,354	$	45,196

(1)Gross sales price is the gross contract price, excluding closing costs.

(2)Properties were classified as held for sale as of December 31, 2020.

(3)Consists of a warehouse facility adjacent to a property we own located in Kansas City, MO.

(4)Consists of two vacant land parcels adjacent to properties we own located in Sterling, VA.

As of December 31, 2021, the following four properties met the criteria to be classified as held for sale in our consolidated balance sheet:


Date of Sale Agreement	Location	Number of Properties	Rentable Square Feet	Gross Sales Price (1)		Loss on Impairment of Real Estate
December 2021	Rockville, MD (2)	1	129,000	$	6,750	$	6,236
December 2021	Chesapeake, VA (3)	2	172,000	18,945		—
January 2022	Milwaukee, WI	1	29,000	3,850		755












		4	330,000	$	29,545	$	6,991

(1)Gross sales price is the gross contract price, excluding closing costs.

(2)The sale of this property was completed in January 2022.

(3)The sale of these properties was completed in February 2022.

As of February 15, 2022, we have entered into an agreement to sell one property that was classified as held for sale as of December 31, 2021 containing approximately 29,000 rentable square feet for a sales price of $3,850, excluding closing costs. This pending sale is subject to conditions, accordingly, we cannot be sure that we will complete this sale or that this sale will not be delayed or the terms will not change.

We also recorded a $10,658 loss on impairment of real estate to reduce the carrying value of three properties that were classified as held for sale to their estimated fair values less costs to sell as of September 30, 2021. Subsequently, we removed these properties from held for sale status due to a change of plan for sale and recorded an impairment adjustment of $425 to increase the carrying value of these properties to their estimated fair value as of December 31, 2021.

In November 2021, the buyer terminated the previously disclosed agreement to sell five properties located in Brookhaven, GA for a sales price of $56,000.

2020 Disposition Activities

During the year ended December 31, 2020, we sold 10 properties containing approximately 906,000 rentable square feet for an aggregate sales price of $110,463, excluding closing costs and including the repayment of one mortgage note with an outstanding principal balance of $13,095, an annual interest rate of 5.9% and a maturity date in August 2021.


Date of Sale	Number of Properties	Location	Rentable Square Feet	Gross Sales Price (1)		Gain (Loss) on Sale of Real Estate		Loss on Impairment of Real Estate
January 2020	2	Stafford, VA	65,000	$	14,063	$	4,771	$	—
January 2020	1	Windsor, CT	97,000	7,000		314		—
February 2020	1	Lincolnshire, IL	223,000	12,000		1,179		—
March 2020	1	Trenton, NJ (2)	267,000	30,100		(179)		—
March 2020	1	Fairfax, VA	83,000	22,200		4,754		—
October 2020	4	Fairfax, VA	171,000	25,100		16		2,954









	10		906,000	$	110,463	$	10,855	$	2,954

(1)Gross sales price is the gross contract price, excluding closing costs.

(2)We recorded a $9,454 loss on impairment of real estate during the year ended December 31, 2019 to adjust the carrying value of this property to its fair value less costs to sell.

2019 Disposition Activities

During the year ended December 31, 2019, we sold 58 properties containing approximately 6,179,000 rentable square feet for an aggregate sales price of $848,853, excluding closing costs.


Date of Sale	Number of Properties	Location	Rentable Square Feet	Gross Sales Price (1)		Gain (Loss) on Sale of Real Estate		Loss on Impairment of Real Estate
February 2019	34	Northern Virginia and Maryland	1,636,000	$	198,500	$	—	$	732
March 2019	1	Washington, D.C. (2)	129,000	70,000		22,075		—
May 2019	1	Buffalo, NY	122,000	16,900		—		5,137
May 2019	1	Maynard, MA	287,000	5,000		(227)		—
June 2019	1	Kapolei, HI	417,000	7,100		—		—
July 2019	1	San Jose, CA	72,000	14,000		(270)		—
July 2019	1	Nashua, NH	322,000	25,000		8,401		—
August 2019	1	Arlington, TX	182,000	14,900		187		—
August 2019	1	Rochester, NY	95,000	4,765		(104)		—
August 2019	1	Hanover, PA	502,000	5,500		(417)		—
August 2019	1	San Antonio, TX	618,000	198,000		3,869		—
September 2019	1	Topeka, KS	144,000	15,600		36		—
September 2019	1	Falling Waters, WV	40,000	650		—		2,179
September 2019	1	San Diego, CA	44,000	8,950		3,062		—
October 2019	3	Columbia, SC	181,000	10,750		—		3,581
November 2019	3	Metro DC - MD	373,000	61,938		1,177		—

December 2019	1	San Diego, CA	148,000	23,750		6,823		—
December 2019	1	Phoenix, AZ	123,000	12,850		860		—
December 2019	1	Houston, TX	497,000	130,000		59,992		—
December 2019	1	Kansas City, KS	171,000	11,700		—		1,172
December 2019	1	San Jose, CA	76,000	13,000		(333)		—
	58		6,179,000	$	848,853	$	105,131	$	12,801

(1)Gross sales price is the gross contract price, excluding closing costs.

(2)Represents an individually significant disposition.

Unconsolidated Joint Ventures

We own interests in two joint ventures that own three properties. We account for these investments under the equity method of accounting. As of December 31, 2021 and 2020, our investments in unconsolidated joint ventures consisted of the following:


	OPI Ownership	OPI Carrying Value of Investments at December 31,				Number of Properties	Location	Rentable Square Feet
Joint Venture		2021		2020
Prosperity Metro Plaza	51%	$	20,672	$	21,888	2	Fairfax, VA	329,000
1750 H Street, NW	50%	14,166		16,063		1	Washington, D.C.	115,000
Total		$	34,838	$	37,951	3		444,000

The following table provides a summary of the mortgage debt of our two unconsolidated joint ventures:


Joint Venture	Interest Rate (1)	Maturity Date	Principal Balance at December 31, 2021 and 2020 (2)
Prosperity Metro Plaza	4.09%	12/1/2029	$	50,000
1750 H Street, NW	3.69%	8/1/2024	32,000
Weighted Average/Total	3.93%		$	82,000

(1)Includes the effect of mark to market purchase accounting.

(2)Reflects the entire balance of the debt secured by the properties and is not adjusted to reflect the interests in the joint ventures we do not own. None of the debt is recourse to us.

At December 31, 2021, the aggregate unamortized basis difference of our two unconsolidated joint ventures of $6,977 is primarily attributable to the difference between the amount we paid to purchase our interest in these joint ventures, including transaction costs, and the historical carrying value of the net assets of these joint ventures. This difference is being amortized over the remaining useful life of the related properties and the resulting amortization expense is included in equity in net losses of investees in our consolidated statements of comprehensive income (loss).